- XAU/USD is consolidating within the $1880s amid conflicting forces.
- Gold prices continue to eye a test of the so-far elusive $1900 mark.
Spot gold (XAU/USD) prices have remained largely rangebound thus far this Friday and have for the most part stuck within $1880-$1890 parameters. On the day, the precious metal trades with minor losses of around $2 or 0.1%.
Conflicting forces keeping gold rangebound
It has been a bit of a rollercoaster day for US bond markets, with nominal 10-year yields swinging between 94bps to 92bps and back again, all while 10 year real yields have swung between -102bps and -104bps and back again. Real yields clearly remain at depressed levels, which helps to keep the bid under precious metals like gold, as does rising inflation expectations.
Meanwhile, things have been choppy in US equity markets amid quadruple witching and ahead of the inclusion of Telsa into the index on Monday (that is going to prompt multiple billions in purchases of TSLA stock by S&P 500 index tracker funds). As things stand, the S&P 500 trades around half a percent lower, the Nasdaq 100 trades lower by slightly less and the Dow trades lower by slightly more, which ought to be offering some support to safe-haven gold.
However, spot gold has a negative correlation to the US dollar, which has been on the front foot today. Nothing, in particular, has changed for the US dollar fundamentally speaking (markets still expect a dovish Fed and fiscal stimulus in the new year), so Friday’s move is most likely a result of shorts taking profit/position adjustment on the final day of the week, which, incidentally is the final trading day of the calendar year for many (lucky) market participants who will be taking the rest of the year off to enjoy Christmas with their families.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks
AUD/USD awaits RBA Meeting Minutes for direction
The AUD/USD pair retreated from above 0.6700 and trades around 0.6670 early in Asia, following clues from Gold price in the absence of other news. Australia will publish Westpac Consumer Confidence and RBA Minutes early on Tuesday.
EUR/USD consolidates ahead of 1.0900
The EUR/USD pair failed to grab speculative interest’s attention on Monday and consolidated at around 1.0860. Federal Reserve officials keep flooding the news, but so far, failed to spur some action.
Gold retreated from record highs, maintains the upward bias
Gold rose sharply at the beginning of the week on escalating geopolitical tensions and touched a new all-time high of $2,450. With market mood improving modestly, XAU/USD erases a majority of its daily gains but manages to hold above $2,400.
Ethereum poised for high volatility as SEC may ‘slow play S-1s’ filings
Ethereum's (ETH) price movement on Monday reveals traders' uncertainty following Grayscale CEO's departure and expectations that the Securities & Exchange Commission (SEC) would deny applications for spot ETH ETFs this week.
Signed into law: Alabama abolishes income taxes on Gold and Silver
On May 14, 2024, Alabama Governor Kay Ivey signed a bill that removes all income taxes on capital gains from the sale of gold and silver, enabling the state to take an important step forward in reinforcing sound money principles.