Gold Spot / U.S. DollarUpdated Gold Slips Below $1,990 Mark
Gold recently experienced a dip after briefly surpassing the $1,990 mark earlier in the day, erasing part of its daily gains. Nevertheless, it managed to hold above $1,980 as U.S. 10-year Treasury yields dropped below 4.7%. Gold displayed a two-way price action on Wednesday, approaching $2,000 in anticipation of the Fed's policy announcements. However, gold prices later reversed course, testing $1,970, in response to the Fed's decision to maintain its current key policy interest rates at 5.25%-5.50%.
During the press conference with Fed Chairman Jerome Powell, his responses contributed to a decline in the U.S. dollar and Treasury yields, boosting gold's appeal. While Powell didn't rule out the possibility of another interest rate hike, his comments were perceived as less hawkish than expected, acknowledging the tightening of financial conditions, a strong labor market, economic resilience, and high inflation.
The retreat in U.S. Treasury yields was partly due to the Treasury Department's announcement of a reduced pace of long-term bond auctions. The 10-year Treasury yield standard dropped over 20 basis points to 4.7089%, marking a two-week low.
In addition, the U.S. dollar faced mixed economic data, with U.S. ADP private payrolls increasing by 113,000 in September, below the expected 130,000. The U.S. ISM Manufacturing PMI index fell to 57.49 in September from an expected 59.55. The Job Openings and Labor Turnover Summary (JOLTS) report showed job openings at 10.9 million on the last business day of September, slightly up from the revised 10.25 million in August and higher than the expected 10.08 million.
Gold's recovery continued in the Thursday trading session as investors weigh the Fed's interest rate trajectory, with reduced bets on a December and January rate hike. This shift toward risk-on sentiment is expected to weaken the U.S. dollar's safe-haven status, as traders look ahead to Friday's release of the U.S. Nonfarm Payrolls data.
Traders will also closely watch the Bank of England's (BoE) monetary policy decision, which is expected to keep the base interest rate unchanged at 5.25% for the second consecutive meeting. The BoE's steady stance is likely to boost equities and ease some pressure on the U.S. dollar, while gold prices remain technically well-supported.
During the press conference with Fed Chairman Jerome Powell, his responses contributed to a decline in the U.S. dollar and Treasury yields, boosting gold's appeal. While Powell didn't rule out the possibility of another interest rate hike, his comments were perceived as less hawkish than expected, acknowledging the tightening of financial conditions, a strong labor market, economic resilience, and high inflation.
The retreat in U.S. Treasury yields was partly due to the Treasury Department's announcement of a reduced pace of long-term bond auctions. The 10-year Treasury yield standard dropped over 20 basis points to 4.7089%, marking a two-week low.
In addition, the U.S. dollar faced mixed economic data, with U.S. ADP private payrolls increasing by 113,000 in September, below the expected 130,000. The U.S. ISM Manufacturing PMI index fell to 57.49 in September from an expected 59.55. The Job Openings and Labor Turnover Summary (JOLTS) report showed job openings at 10.9 million on the last business day of September, slightly up from the revised 10.25 million in August and higher than the expected 10.08 million.
Gold's recovery continued in the Thursday trading session as investors weigh the Fed's interest rate trajectory, with reduced bets on a December and January rate hike. This shift toward risk-on sentiment is expected to weaken the U.S. dollar's safe-haven status, as traders look ahead to Friday's release of the U.S. Nonfarm Payrolls data.
Traders will also closely watch the Bank of England's (BoE) monetary policy decision, which is expected to keep the base interest rate unchanged at 5.25% for the second consecutive meeting. The BoE's steady stance is likely to boost equities and ease some pressure on the U.S. dollar, while gold prices remain technically well-supported.
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