- Gold prices could struggle due to the improved US Treasury yields.
- Fed Chair Powell’s hawkish remarks lift the US Dollar.
- Israel agrees to daily four-hour pauses in military operations in northern Gaza.
Gold price rebounds from a three-week low, trading around $1,960 per troy ounce during the Asian session on Friday. The price of gold is on the rise, defying the strengthened US Dollar (USD) and elevated US Treasury yields that resulted from the hawkish comments made by US Federal Reserve (Fed) Chair Jerome Powell on Thursday.
Fed Chair Powell is worried that the implemented policies may not be restrictive enough to bring inflation down to the target over time. Despite this concern, there's a prevailing belief in the markets that the Fed has completed its tightening cycle, which contributed to undermining the US Dollar (USD).
The US Dollar Index (DXY) hovers around 105.90 post gains registered in the previous session on the back of the higher US Treasury yields. The yield on a 10-year US bond coupon stands at 4.61% by the press time.
Additionally, for the week ending November 4, US weekly Initial Jobless Claims came in at 217K, just a tad below the market forecast of 218K and the preceding week's figure of 220K. This result could further bolster the confidence in a strong labor market in the United States, providing extra support for the Greenback.
The Israel-Hamas conflict is currently contained, with Israel agreeing to daily four-hour pauses in military operations in northern Gaza. These "tactical localized pauses" are intended to facilitate travel for aid and relief in the affected areas.
Investors await the preliminary US Michigan Consumer Sentiment Index for November, along with the UoM 5-year Consumer Inflation Expectation. These releases could potentially offer additional momentum for Gold traders.
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