Gold price slides to its lowest level since October 18 ahead of Fed Chair Powell's speech


  • Gold price drops to a fresh multi-week low on Thursday, albeit lacks follow-through.
  • Bets that the Fed is done hiking rates and China's economic woes lend some support.
  • Traders also seem reluctant and look to Fed Chair Powell's speech for a fresh impetus.

Gold price (XAU/USD) remains depressed for the fourth straight day on Thursday and drops to the $1,944 area, or a fresh low since October 18 during the first half of the European session. The precious metal, however, manages to bounce off a bit in the last hour as traders await more cues on the Federal Reserve’s (Fed) future rate-hike path before placing fresh directional bets. Hence, the focus will remain glued to the Fed Chair Jerome Powell's speech later during the US session, which will influence the US Dollar (USD) price dynamics and provide some meanignful impetus to the commodity.

In the meantime, a modest recovery in the US Treasury bond yields lends some support to the USD, which, along with easing fears about a further escalation in the Israel-Hamas conflict, should act as a headwind for the safe-haven Gold price. The downside, however, remains cushioned as investors now seem convinced that the Fed is nearing the end of its rate-hiking cycle. Furthermore, concerns about the worsening economic conditions in China – the world's second largest economy – should continue to limiting losses for the precious metal, waranting caution for aggressive bearish traders. 

Daily Digest Market Movers: Gold price refreshes multi-week low amid a modest USD uptick

  • Gold price remains depressed through the European session on Thursday and drops to its lowest since October 18 amid a modest US Dollar uptick, albeit lacking follow-through.
  • The yield on the benchmark 10-year US government bond bounce off its lowest in more than a month and lend support to the USD, exerting some pressure on the non-yielding yellow metal.
  • Federal Reserve officials keep the door open for further policy tightening, though the CME FedWatch Tool indicates an 18% chance that rate cuts could come as early as March.
  • Fed Governor Lisa Cook views the current policy as restrictive enough for price stability, while Minneapolis Fed President Neil Kashkari questions its adequacy in light of the US economic resilience.
  • Chicago Fed President Austan Goolsbee stressed the need to focus on how high rates should remain, whereas Fed Governor Michelle Bowman discussed additional rate hikes this year.
  • Fed Chair Jerome Powell, meanwhile, did not comment on monetary policy or the economic outlook on Wednesday and is scheduled to speak again at another conference this Thursday.
  • The latest Chinese inflation figures released earlier this Thursday pointed to sustained disinflationary pressures in the wake of the worsening outlook for the domestic economy.
  • The National Bureau of Statistics reported that the headline CPI in China shrank 0.1% in October as compared to a 0.2% rise in the previous month and the yearly rate shrank 0.2%.
  • China's Producer price index (PPI) declined for the 13th straight month, by 2.6% in October, slightly higher than the 2.5% prior, though it was better than the 2.8% drop anticipated.

Technical Analysis: Gold price might struggle to register any meaningful recovery in the near-term

From a technical perspective, the overnight break and close below the $1,954-1,953 support zone favours bearish traders. Moreover, oscillators on the daily chart have just started gaining negative traction and support prospects for a further depreciating move. Hence, a subsequent slide towards testing the very important 200-day Simple Moving Average (SMA), currently pegged around the $1,933 region, looks like a distinct possibility. This is followed by the 100-day SMA, near the $1,927-1,926 area, which if broken decisively will suggest that the Gold price has topped out in the near term.

On the flip side, any meaningful recovery attempt might now confront stiff resistance near the $1,970 level. A sustained strength beyond could trigger a short-covering move towards the next relevant hurdle near the $1,980 region en route to the $1,990-$1,992 zone. Some follow-through buying will shift the bias back in favour of bullish traders and lift the Gold price further beyond the $2,000 psychological mark, towards retesting a multi-month top, around the $2,009-2,010 area touched in October.

US Dollar price today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.

  USD EUR GBP CAD AUD JPY NZD CHF
USD   0.01% 0.02% -0.01% -0.07% 0.05% -0.22% 0.02%
EUR -0.01%   0.01% -0.03% -0.08% 0.04% -0.23% 0.00%
GBP -0.02% 0.00%   -0.03% -0.11% 0.03% -0.23% -0.01%
CAD 0.01% 0.03% 0.04%   -0.04% 0.05% -0.20% 0.03%
AUD 0.07% 0.10% 0.09% 0.06%   0.12% -0.15% 0.08%
JPY -0.04% -0.01% -0.03% -0.07% -0.11%   -0.26% -0.04%
NZD 0.22% 0.26% 0.23% 0.21% 0.15% 0.27%   0.23%
CHF -0.02% 0.01% 0.01% -0.02% -0.07% 0.04% -0.22%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

Economic Indicator

United States Fed's Chair Powell speech

Jerome H. Powell took office as a member of the Board of Governors of the Federal Reserve System on May 25, 2012, to fill an unexpired term. On November 2, 2017, President Donald Trump nominated Powell to serve as the next Chairman of the Federal Reserve. Powell assumed office as Chair on February 5, 2018.

Read more.

Next release: 11/09/2023 19:00:00 GMT

Frequency: Irregular

Source: Federal Reserve

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