- Gold dips from all-time high amid strong US jobs data and steady core inflation.
- Investors remain risk-averse ahead of November 5 US election, polls show a narrow race between Trump and Harris.
- Nonfarm Payrolls and Fed’s upcoming rate decision keep traders cautious.
Gold price retreated from all-time high on Thursday as traders failed to capitalize on falling US Treasury bond yields. Nevertheless, the precious metal is set to end the month with gains of over 4% and to remain above the $2,700 threshold.
The XAU/USD trades at $2745, down 1.49%. The US 10-year Treasury bond yield dropped almost two basis points to 4.284%.
Risk aversion is the name of the game ahead of the US Presidential Election on November 5. Meanwhile, the release of the Federal Reserve’s preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index, alongside a strong jobs report, weighed on the precious metal price.
In the meantime, the latest opinion polls show that the race for the White House is narrowing between the Republican candidate, former US President Donald Trump, and the Democratic candidate, Vice President Kamala Harris.
US data from the Bureau of Economic Analysis (BEA) showed that headline inflation dipped. However, the core Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge, remained unchanged in October compared to September's level.
The US Department of Labor revealed that the number of Americans filing for unemployment benefits in the week ending October 26 dipped to its lowest level in five months.
Geopolitical tensions remain high in the Middle East, even though US Secretary of State Anthony Blinken stated “good progress” towards a ceasefire in Lebanon. Meanwhile, the Israeli military revealed the movement of ballistic missiles in Iran, hinting that a truce is far from being reached.
Bullion traders await the Nonfarm Payrolls report and have priced in a 95% chance of the Fed cutting interest rates by 25 basis points next week.
Daily Digest Market Movers: Gold price retreats amid goodish US data
- The US Dollar Index (DXY), which tracks the Dollar's value against a basket of six currencies, dropped 0.18% at 104.08.
- The US headline PCE decreased from 2.3% to 2.1% year-over-year (YoY), moving closer to the Fed’s 2% target. However, the Core PCE, which excludes volatile items, remained unchanged at 2.7% YoY, slightly above forecasts of 2.6%.
- US Initial Jobless Claims for the week ending October 26 fell from 228K to 216K, coming in below the forecast of 230K.
- Data from the Chicago Board of Trade, based on the December fed funds rate futures contract, indicates that investors estimate 49 basis points (bps) of Fed easing by the end of the year.
XAU/USD Technical Outlook: Gold price retreats below $2,750 as bulls take a breather
Gold retreated from record highs, yet it remains bullishly biased. If XAU/USD bulls keep the spot price above $2,700, look for further gains once it clears the psychological $2,750 figure, ahead of the all-time high at $2,790. A breach of the latter, and the $2,800 threshold is up for grabs.
On the other hand, if sellers move in and push prices below $2,708 where the October 23 daily low lies, it will expose the $2,700 mark. Up next is the September 26 swing high, which turned support at $2,685, followed by the 50-day Simple Moving Average (SMA) at $2,603.
Momentum suggests the non-yielding metal could consolidate as the Relative Strength Index (RSI) remains bullish. This means that buyers are gathering momentum.
Economic Indicator
Core Personal Consumption Expenditures - Price Index (MoM)
The Core Personal Consumption Expenditures (PCE), released by the US Bureau of Economic Analysis on a monthly basis, measures the changes in the prices of goods and services purchased by consumers in the United States (US). The PCE Price Index is also the Federal Reserve’s (Fed) preferred gauge of inflation. The MoM figure compares the prices of goods in the reference month to the previous month.The core reading excludes the so-called more volatile food and energy components to give a more accurate measurement of price pressures. Generally, a high reading is bullish for the US Dollar (USD), while a low reading is bearish.
Read more.Last release: Thu Oct 31, 2024 12:30
Frequency: Monthly
Actual: 0.3%
Consensus: 0.3%
Previous: 0.1%
Source: US Bureau of Economic Analysis
After publishing the GDP report, the US Bureau of Economic Analysis releases the Personal Consumption Expenditures (PCE) Price Index data alongside the monthly changes in Personal Spending and Personal Income. FOMC policymakers use the annual Core PCE Price Index, which excludes volatile food and energy prices, as their primary gauge of inflation. A stronger-than-expected reading could help the USD outperform its rivals as it would hint at a possible hawkish shift in the Fed’s forward guidance and vice versa.
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
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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.