Gold begins the new week on a negative note, despite continuing USD purchasing activity.
Gold price (XAUUSD) opens with a tiny bearish gap at the start of the new week, eroding some of Friday’s positive rise back closer to the $2,748-2,750 supply zone.
Bets for lesser Fed rate reduction and deficit-spending concerns send US bond yields higher.
Firming expectations for less aggressive policy easing by the Federal Reserve (Fed), along with deficit-spending concerns following the US election, causes a new leg up in US Treasury bond yields. This, in turn, boosts the US Dollar (USD) has reached a new high since July 30, forcing flows away from the non-yielding yellow metal.
Furthermore, a generally bullish risk tone appears to be another element putting downward pressure on the gold market, albeit a major corrective decrease remains elusive. Safe-haven demand due to Middle East tensions and US election fears may support the Gold (XAUUSD). Traders may also want to wait for this week’s key US macro data, including the Advance Q3 GDP print, the Personal Consumption Expenditures (PCE) Price Index, and the Nonfarm Payrolls (NFP) report.
Daily Market Movers: Gold prices remain low despite continued USD buying and higher US bond yields.
The US dollar extended its recent strong gains over the previous four weeks and reached its highest level since July 30 amid expectations of a less aggressive policy easing by the Federal Reserve.
According to the CME Group’s FedWatch Tool, markets have virtually fully priced in the probability of a regular 25 basis point rate drop by the US central bank at its November meeting.
The most recent poll shows a close fight between Vice President Kamala Harris and Republican contender Donald Trump amid deficit-spending concerns following the November 5 US presidential election.
Furthermore, the US macro releases on Friday contributed to a string of recent good data, implying that the economy remains healthy, supporting market forecasts on smaller Fed rate decreases.
The United States Census Bureau reported that Durable Goods orders in the United States fell by 0.8% in September, less than the projected 1% drop, while new orders excluding transportation rose by 0.4%.
Furthermore, the University of Michigan’s Consumer Sentiment Index rose to a six-month high of 70.5 in October, surpassing both the preliminary result and the prior month’s reading.
The yield on the benchmark 10-year US government bond remains strong near a three-month high reached last week, boosting the USD but hurting on the non-yielding precious metal.
The XAUUSD falls as fears of a potential escalation in the Israel-Iran crisis subside.
Gold falls as fears of a potential escalation in the Israel-Iran crisis subside. Iran said on Saturday that it would not react against Israeli strikes on military targets throughout its territory if a cease-fire agreement in the Gaza Strip and Lebanon is reached.
China’s Vice Minister of Finance, Liao Min, stated Goods orders in the United States fell by 0.8% in September, less than the projected 1% drop, while new orders excluding transportation rose by 0.4%.
Furthermore, the University of Michigan’s Consumer Sentiment Index rose to a six-month high of 70.5 in October, surpassing both the preliminary result and the prior month’s reading.
The yield on the benchmark 10-year US government bond remains strong near a three-month high reached last week, boosting the USD but hurting on the non-yielding precious metal.
Iran said on Saturday that it would not react against Israeli strikes on military targets throughout its territory if a cease-fire agreement in the Gaza Strip and Lebanon is reached.
China’s Vice Minister of Finance, Liao Min, stated
