Gold Glistens Amid USD Pause, But Treasury Yields May Limit Gains

During the early trading hours in Asia, GOLD (XAU/USD) is witnessing a slight uptick, trading near $1,940, a 0.22% increase, as the US Dollar’s stabilization provides a buffer. However, the ascent of US Treasury yields could restrain the metal’s upward potential in the forthcoming session.

Despite San Francisco Fed President Mary Daly withholding judgment on the end of interest rate hikes, Fed Chair Jerome Powell has emphasized the readiness to tighten policy if needed. Upcoming US CPI data could influence Federal Reserve decisions, potentially impacting gold’s trajectory given its sensitivity to interest rate changes. Notably, robust data may boost expectations for a rate hike in

December, which typically dampens allure for non-yielding assets like GOLD .

Additionally, China’s economic slowdown, underscored by a decline in October’s CPI, poses a downside risk for GOLD prices, considering China’s status as a major gold producer and consumer. Investors will also scrutinize this week’s Chinese Retail Sales and Industrial Production figures for further economic insights.
The highlight of the week, the US Consumer Price Index release on Tuesday, is projected to show a marginal increase of 0.1% for October, while core CPI is expected to hold steady at 0.3%. These indicators will be pivotal in setting the course for GOLD prices.

On Friday, gold retreated over 1%, heading towards a consecutive weekly drop as demand for safe-haven assets waned and Powell’s hawkish remarks exerted additional pressure.

In a significant downturn, palladium prices plunged to a five-year low, falling beneath $1,000 per ounce. The downturn is accelerated by expectations of market surpluses and a shift by automakers to opt for the less expensive platinum in vehicle catalysts.

From a technical perspective, gold is exhibiting minor bearish activity, drifting away from the $1962.35 level, suggesting a continued downtrend might ensue, targeting the $1933.30 level.

This outlook is backed by the current negative momentum indicated by the stochastic oscillator, with sustained bearishness contingent upon the metal remaining below the $1962.35 and $1974.80 thresholds.

Today’s projected trading range lies between the support level of $1940.00 and the resistance at $1970.00, with an overall bearish trend anticipated for the day.

Gold XAU Live Chart