- Gold rose to its highest level in over two weeks on Monday.
- Falling US T-bond yields, broad dollar weakness fuel XAU/USD's rally.
- ISM Manufacturing PMI's Priced Paid component continued to fall in September.
Gold gathered bullish momentum and climbed above $1,690 for the first time since mid-September. As of writing, XAU/USD was trading at $1,690, where it was up 1.7% on a daily basis.
The sharp decline witnessed in the US Treasury bond yields seems to be fueling gold's rally on the first trading day of the fourth quarter. The benchmark 10-year US T-bond yield was last seen losing 5.5% on the day at 3.6%. Reflecting the negative impact of falling yields' on the dollar's market valuation, the US Dollar Index is down 0.3% on the day below 112.00.
The data published by the ISM showed on Monday that the Manufacturing PMI declined to 50.9 in September from 52.8 in August. This pring fell short of analysts' estimate of 52.2. Additionally, the Prices Paid component of the PMI survey fell to 51.7 from 52.2, pointing to a further easing of input price pressures.
After this report, the probability of one more 75 basis points Fed rate hike in November declined toward 50%, revealing a shift in market positioning ahead of this week's highly-anticipated September jobs report.
Meanwhile, the improving market mood, as reflected by Wall Street's main indexes' impressive gains, is not allowing the dollar to stage a rebound.
Several FOMC policymakers will be delivering speeches later in the session but gold should manage to end the day with strong gains unless there is a decisive rebound in US T-bond yields.
Technical levels to watch for
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 fluctuates near 1.0850 as markets assess Fed commentary
EUR/USD trades in a tight range at around 1.0850 on Tuesday. In the absence of high-tier data releases, the cautious market mood helps the USD hold its ground and limits the pair's upside. Meanwhile, investors continue to scrutinize comments from central bank officials.
GBP/USD stays in positive territory above 1.2700, awaits fresh catalysts
GBP/USD struggles to stretch higher above 1.2700 on Tuesday as the mixed action in Wall Street supports the USD. Investors await fresh catalysts, with several Fed officials and BoE Governor Bailey set to speak later in the session.
Gold rebounds to $2,430 as US yields edge lower
Gold gained traction and climbed to $2,430 area in the American session, turning positive on the day. The pullback in the benchmark 10-year US Treasury bond yield helps XAU/USD stage a rebound following the sharp retreat seen from the all-time high set at the weekly opening at $2,450.
Shiba Inu price flashes buy signal, 25% rally likely Premium
Shiba Inu price has flipped bullish to the tune of the crypto market and breached key hurdles, showing signs of a potential rally. Investors looking to accumulate SHIB have a good opportunity to do so before the meme coin shoots up.
Three fundamentals for the week: UK inflation, Fed minutes and Flash PMIs stand out Premium
Sell in May and go away? That market adage seems outdated in the face of new highs for stocks and Gold. Optimism depends on the easing from central banks – and some clues are due this week.