Gold drops to fresh 2-month lows on firming Fed rate hike expectations

Haresh Menghani FXStreet

Gold faded dismal headline NFP-led spike to $1272 region and tumbled to fresh two-month low level of $1264.

The precious metal spiked after the latest US monthly jobs report showed the number of employed people declined, for the first time in 7-years, by 33K during the month of September. Investors, however, quickly realized that weaker headline numbers were primarily led by disruptions caused by Hurricanes - Harvey and Irma.

Meanwhile, the finer details of the report, showing an unexpected drop in the unemployment rate and stronger average hourly wage growth, reaffirmed that the Fed would eventually move towards raising interest for the third time this year.

• US: Payrolls distorted, but strong wages boosts case for Dec rate hike - ING

The same is evident from a sharp upsurge in the US Treasury bond yields, which provided an additional boost to the already stronger US Dollar and was eventually seen weighing heavily on the non-yielding/dollar-denominated yellow metal.

Technical levels to watch

A follow through weakness below $1260 level is likely to accelerate the slide towards $1254 intermediate support before the metal eventually drops to the $1250 region.

On the flip side, $1267 level now becomes immediate resistance and any recovery attempts beyond the mentioned hurdle might now be capped at 100-day SMA, currently near the $1273 region.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

GBP/USD bounces off four-day lows, still below 1.3500

GBP/USD sticks to the bearish tone on Thursday, coming down to the 1.3480 region in the latter part of the NA session. In the meantime, Cable’s weakness comes as investors continue to assess mixed UK data, poor US results, and the persistent uncertainty surrounding the US-Iran conflict.

EUR/USD looks apathetic around 1.1530

EUR/USD reverses Wednesday’s downtick and trades with modest gains in the 1.1530 region following the end of the NA session on Thursday. The pair’s tepid advance comes on the back of the absence of clear direction in the US Dollar despite tensions from the Middle East appear far from alleviated. Later on Friday, investors are expected to monitor the the releases of another revision of GDP figures in the Euroland, US Retail Sales and the preliminary U-Mich gauge.

Gold loses the grip, recedes toward $4,350

Gold extends its intraday pullback on Thursday, retesting the $4,350 zone per troy ounce, or three-day troughs. Meanwhile, the yellow metal continues to monitor developments from the Middle East as well as bets surrounding the potential Fed’s rate path.

Ethereum Price Forecast: Fidelity plans to add staking to ETH ETF amid yield debate

Asset manager Fidelity has filed with the US Securities and Exchange Commission (SEC) to permit staking in its Ethereum (ETH) exchange-traded fund (ETF), the Fidelity Ethereum Fund (FETH), which holds over $898 million in net assets.

Week ahead – Summer lull could be tested by geopolitics and central bank expectations

US dollar stabilizes as September Fed hike bets remain subdued. Market volatility stays low, but thin liquidity could amplify movements. Key UK data could challenge pound strength; euro craves bullish catalysts.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.