- Gold price ascends to a two-week peak at $1877.21, buoyed by declining US Treasury yields.
- Fed minutes reveal concerns over dual-sided risks to inflation and economic activity, influencing policy outlook.
- US producer-side inflation data and varied Fed official stances complicate the gold price trajectory.
Gold price (XAU/USD) climbed for the second straight day and printed a two-week high at around $1877.21 on Wednesday, courtesy of falling US Treasury bond yields spurred by the latest Fed meeting minutes. At the time of writing, the XAU/USD is trading at 1874.73, almost flat as the Asian session begins.
XAU/USD navigates through Fed minutes, inflation data, and official commentary
In the meantime, the US Dollar Index retreated further from the 11-month highs reached last week, a tailwind for XAU/USD prices. Additionally, benchmark yields on the US 10-year Treasury note pulled back from their highest levels since 2007. These factors contributed to the rise in Gold prices.
The US Federal Reserve recently released minutes from its September monetary policy meeting. According to these minutes, participants acknowledged both upside risks to inflation and downside risks to economic activity. This suggests a two-sided challenge in achieving the Fed's objectives. Policymakers also noted that as policy approaches its peak, decisions, and communications should start shifting toward a longer horizon of keeping rates higher for an extended period.
Furthermore, the US Department of Labor (DoL) reported that producer-side inflation figures exceeded expectations, with most figures surpassing those from August. However, the monthly reading for the Producer Price Index (PPI) expanded less than the previous month, indicating that inflation remains a concern, possibly influenced by high energy prices and the automobile union strike.
In terms of recent statements from Fed officials, many have adopted a more neutral stance, except for Fed Governor Michelle Bowman, who emphasized the need for further tightening to address inflationary pressures.
XAU/USD Technical Levels
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
AUD/USD: Outlook is still bearish below 0.6630
AUD/USD extended its gains from Wednesday, supported by continued selling pressure on the US Dollar. However, weak performance in the commodities market and disappointing Chinese PMI data limited the Australian dollar's upward potential.
EUR/USD extends upside above 1.0850, with all eyes on US NFP data
The EUR/USD pair extends the rally to 1.0885 during the early Asian session on Friday. The uptick of the major pair is bolstered by the weakening of the US Dollar. All eyes will be on the US Nonfarm Payrolls, which is due later on Friday.
Gold retreated sharply, trades around $2,740
Prices of Gold trade markedly on the defensive on Thursday following a marginal uptick in the Greenback and declining US yields. Despite the daily pullback, the yellow metal is anticipated to remain bolstered by steady uncertainty pre-US election.
Maker Price Forecast: MKR could stage 40% rally
MakerDAO is up 2% on Thursday and could be set for a 40% rise in the coming weeks if it successfully maintains an extended move above the descending trendline of a falling wedge. On-chain data also supports the bullish outlook after a four-month-long decline.
Bank of Japan holds rates steady amid signs of modest GDP growth
Monthly industrial production results have been mixed but generally indicate a modest recovery in third-quarter GDP. Clear guidance from the Bank of Japan remains elusive, with each upcoming meeting being pivotal.
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.