Quick overview

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Gold (XAU/USD) ended its four-day losing streak on Thursday, trading at around $3,950 per troy ounce. Prices are rising as the supply of metal in both official and exchange channels remains limited due to ongoing central bank purchases and new ETF inflows.

However, non-yielding gold faced challenges after Federal Reserve Chair Jerome Powell highlighted the continuing uncertainty about the future during the post-meeting press conference, stating that another rate cut in December is not guaranteed.

The yield on the 10-year Treasury surpassed 4% following these cautious remarks, increasing the opportunity cost of holding non-yielding bullion. The Fed lowered interest rates by 25 basis points, as widely expected.
According to available data, the outlook for inflation and employment has not changed significantly since the September meeting, Fed Chair Powell said. He mentioned that while the government shutdown is ongoing, economic activity will be negatively affected, but things should improve once it ends.

Additionally, by December 1st, the Fed plans to reduce its balance sheet of mortgage-backed assets into long-term Treasuries as part of its continued easing of Quantitative Easing (QE) policies. As investors anticipate higher yields and a stronger US dollar (USD), gold, which thrives in easy-money environments, faced downward pressure.

Gold and other precious metals are struggling due to the market’s improved mood, driven by hopes for a trade agreement between the US and China. Later today, US President Donald Trump and Chinese President Xi Jinping will meet in South Korea..