US Consumer Prices Impact Gold Price Dynamics Amid Fed Speculations
On Thursday, GOLD (XAU/USD) experienced a notable deviation from its over two-week peak of the $1,885 region, culminating near its daily range’s lower boundary. The upswing in US consumer prices for September surpassed anticipations, fueling speculations that the Federal Reserve may sustain elevated interest rates for an extended period.
This speculation subsequently led to a significant surge in US Treasury bond yields, instigating an extensive USD short-covering rally. This dynamic played a pivotal role in pressurizing the precious metal’s valuation.
However, the decline in Gold’s value seems transient. A marginal reduction in US Treasury bond yields and a subdued USD have facilitated Gold’s resurgence beyond the $1,875 mark during Friday’s Asian trading window. Recent statements from multiple Fed authorities, leaning towards a dovish stance, hint at the US central bank nearing the culmination of its rate-augmentation phase.
This caps the ascent in US bond yields, somewhat tempering the momentum of the robust USD.
Moreover, current global geopolitical tensions persist in channeling safe-haven investments toward the non-interest-bearing yellow metal.
Gold Technical Perspective
From an analytical viewpoint, the renewed purchasing interest just before the $1,865 support threshold appears to bolster the bullish camp. However, daily chart technical metrics have not fully endorsed an upward trajectory yet. Thus, traders should exercise prudence prior to aligning with a further upswing.
Any ensuing upward momentum is anticipated to encounter a barrier near the recent peak of $1,885.
Surpassing this, the path towards the $1,900 benchmark becomes plausible, paving the way for augmented gains.
Conversely, the bracket between $1,868 and $1,865 remains a stalwart defender against immediate depreciation. Breaching this could expose GOLD to the $1,853-1,850 spectrum. Should it decisively penetrate this barrier, the trajectory may steer Gold toward the $1,835-1,833 sector, mirroring a previous range’s resistance inflection point. Extended selling could potentially render XAU/USD susceptible to revisiting the substantial lows around $1,810, as observed in the preceding week.
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