- Gold price attracts some buyers after the Federal Open Market Committee (FOMC) rate decision.
- FOMC maintained the monetary policy unchanged at 5.5% at its November meeting.
- Gold traders will focus on the weekly Initial Jobless Claims ahead of Friday's Nonfarm Payrolls (NFP).
Gold price (XAU/USD) stages a modest recovery during the early Asian session on Thursday. The rebound of precious metal is bolstered by a decline in the US Treasury bond yields following the the Federal Open Market Committee (FOMC) policy meeting. As of writing, gold price is trading higher on the day at $1,985.
Meanwhile, the US Dollar Index (DXY), the value of the USD relative to a basket of global currencies, edges lower to 106.67, retracing from the weekly highs of 107.10. The US Treasury bond yields correct lower, with the 10-year dropping to 4.73% and the 2-year yield falling below 5.00%.
The FOMC maintained the monetary policy unchanged at 5.5% at its November meeting late Wednesday. Federal Reserve (Fed) Chairman Jerome Powell stated that the rise in long-end yields needs to be persistent and driven by higher term premiums to influence monetary policy while mentioning that the current monetary policy is already restrictive. The markets believe that the rate hike cycle is already over. This, in turn, exerts some selling pressure on the US Dollar (USD). According to the CME FedWatch Tool, the odds of a rate hike for a December meeting is around 22%.
On the other hand, the weaker Chinese data might cap the gold’s upside as China is the world's largest gold producer and consumer. On Wednesday, China's Caixin Manufacturing PMI dropped to 49.5 in October from September’s expansion of 50.6, worse than the expectation of a 50.8 rise.
Moving on, gold traders will take monitor the US employment data, including the weekly Initial Jobless Claims. The figures are expected to rise by 210K for the week ending October 27. The attention will shift to Friday's Nonfarm Payrolls (NFP), which is expected to add 180K jobs in October. These events could give a clear direction to the gold price.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
USD/JPY remains below 158.00 after Japanese data
Soft US Dollar demand helps the Japanese Yen to trim part of its recent losses, with USD/JPY changing hands around 157.70. Higher than anticipated Tokyo inflation passed unnoticed.
AUD/USD weakens to near 0.6200 amid thin trading
The AUD/USD pair remains on the defensive around 0.6215 during the early Asian session on Friday. The incoming Donald Trump administration is expected to boost growth and lift inflation, supporting the US Dollar (USD). The markets are likely to be quiet ahead of next week’s New Year holiday.
Gold depreciates amid light trading, downside seems limited due to safe-haven demand
Gold edges lower amid thin trading following the Christmas holiday, trading near $2,630 during the Asian session on Friday. However, the safe-haven asset could find upward support as markets anticipate signals regarding the United States economy under the incoming Trump administration and the Fed’s interest rate outlook for 2025.
Floki DAO floats liquidity provisioning for a Floki ETP in Europe
Floki DAO — the organization that manages the memecoin Floki — has proposed allocating a portion of its treasury to an asset manager in a bid to launch an exchange-traded product (ETP) in Europe, allowing institutional investors to gain exposure to the memecoin.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.