Gold prices slumped sharply on Tuesday following a strong US jobs report and newswires revealing that Hezbollah supported calls for a truce in the conflict between them and Israel. Hence, hints of a possible de-escalation of the Middle East conflict opened the door for traders to book profits. The XAU/USD trades at $2,615, down more than 1%.
US equities remain underpinned by an improvement in market mood. Bullion remained near year-to-date (YTD) highs due to fears of further escalation of the Middle East hostilities. However, signs of a possible solution to the conflict would trigger outflows from safe-haven assets to riskier ones. According to CNN, “Hezbollah supports efforts aimed at achieving a ceasefire in Lebanon, its top official said on Tuesday.”
This sponsored a sell-off in XAU/USD, which tumbled over $35 to a daily low of $2,604 before buyers lifted prices to current spot prices. Additionally, the jump in US Treasury yields weighed on the non-yielding metal. The US 10-year benchmark note rate remains unchanged above 4%, yet it’s up over six basis points this week after last Friday’s September Nonfarm Payrolls (NFP) report.
Given the backdrop, interest rate traders adjusted their expectations about the Federal Reserve’s (Fed) next move. Most Fed speakers crossing the wires adopted a gradual tone regarding easing monetary policy. However, some, like St. Louis Fed President Alberto Musalem, projected only one additional cut toward the end of the year after backing September’s 50 bps cut.
In the meantime, the Greenback clings to minimal gains as next week the US docket will feature the release of inflation data, the Fed’s last Meeting Minutes, Initial Jobless Claims, and the University of Michigan Consumer Sentiment.
Gold prices dropped below $2,650 on Tuesday, which could open the door for a deeper pullback. After briefly testing the $2,605 area, it has recovered some ground. But so far, it has failed to gain traction to aim higher and surpass the $2,650 mark.
Momentum shows that bears are stepping up as the Relative Strength Index (RSI), despite being bullish, is aggressively aiming lower.
Once XAU/USD dropped below the September 30 low of $2,624, it sponsored a leg toward the $2,600 mark. On further weakness, the following floor will be the 50-day Simple Moving Average (SMA) at $2,534.
Conversely, if Gold prints a daily close above $2,650, the XAU/USD needs to clear $2,670 to challenge the YTD high of $2,685. Up next will be the $2,700 mark.
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
© 2000-2024. Bản quyền Teletrade.
Trang web này được quản lý bởi Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
Thông tin trên trang web không phải là cơ sở để đưa ra quyết định đầu tư và chỉ được cung cấp cho mục đích làm quen.
Giao dịch trên thị trường tài chính (đặc biệt là giao dịch sử dụng các công cụ biên) mở ra những cơ hội lớn và tạo điều kiện cho các nhà đầu tư sẵn sàng mạo hiểm để thu lợi nhuận, tuy nhiên nó mang trong mình nguy cơ rủi ro khá cao. Chính vì vậy trước khi tiến hành giao dịch cần phải xem xét mọi mặt vấn đề chấp nhận tiến hành giao dịch cụ thể xét theo quan điểm của nguồn lực tài chính sẵn có và mức độ am hiểu thị trường tài chính.
Sử dụng thông tin: sử dụng toàn bộ hay riêng biệt các dữ liệu trên trang web của công ty TeleTrade như một nguồn cung cấp thông tin nhất định. Việc sử dụng tư liệu từ trang web cần kèm theo liên kết đến trang teletrade.vn. Việc tự động thu thập số liệu cũng như thông tin từ trang web TeleTrade đều không được phép.
Xin vui lòng liên hệ với pr@teletrade.global nếu có câu hỏi.