Home · Business · Oct 8 archive
Gold holds near one-week top, around $4,200 on softer USD; hawkish Fed caps gains
Confirmed
In Short: Gold remains near the $4,200 level as the US Dollar retreats from an 18-month peak, but geopolitical risks and hawkish Fed signals cap gains.
Gold is extending its recovery from a two-month low of $4,067, trying to remain above the $4,200 level amid a pause in the US Dollar's retreat from an 18-month peak.
Derivatives data indicates an improving sentiment among Cardano traders, but the fundamental backdrop may hold back USD bears from placing aggressive bets.
Fed Chair Kevin Warsh reiterated concerns over inflation during a press conference, stating that too many categories of products and services showed annualized price gains above 3% over 6- and 12-month periods.
Despite the positive economic indicators, gold struggled to capitalize on the uptick, trading near its lowest level since August 4, around the $4,100 neighborhood.
Analysts at Commerzbank observe that the recent pullback in Gold, which slipped to around USD4,292, reflects a tug-of-war between geopolitical safe-haven demand and macro headwinds.
Gold is receiving short-term support from falling oil prices and lower US Treasury yields, but the near-term bias remains tilted to the downside despite only moderate momentum.
Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council.
Michael Gapen, chief US economist for Morgan Stanley, said, “That’s hawkish. If the chair thinks policy is accommodative, then you’ve got more work to do.”
Gold could not sustain the post-NFP bull run past the $4,200 mark per troy ounce, receding toward the $4,180 region at the end of the week.
UBS sees gold reaching $5,400 by September 2027 despite near-term Fed pressure, citing debt risks, a weaker dollar, and central-bank demand.
Gold is trading near 4,360 USD per ounce on Friday after gaining almost 2% in the previous session, but any failure to defend the $4,200 level would signal that the broader downtrend is resuming.
Market participants have been pricing out the possibility of a rate hike at the late-October Fed meeting, though expectations for a 25-basis-point increase in December remain firmly on the table.
What this adds
The technical analysis of this story was written with the help of an AI tool.
What's confirmed
- Gold is extending its recovery from a two-month low of $4,067, trying to remain above the $4,200 level amid a pause in the US Dollar's retreat from an 18-month peak.
- Derivatives data indicates an improving sentiment among Cardano traders, but the fundamental backdrop may hold back USD bears from placing aggressive bets.
- Fed Chair Kevin Warsh reiterated concerns over inflation during a press conference, stating that too many categories of products and services showed annualized price gains above 3% over 6- and 12-month periods.
- Despite the positive economic indicators, gold struggled to capitalize on the uptick, trading near its lowest level since August 4, around the $4,100 neighborhood.
- Analysts at Commerzbank observe that the recent pullback in Gold, which slipped to around USD4,292, reflects a tug-of-war between geopolitical safe-haven demand and macro headwinds.
- Gold is receiving short-term support from falling oil prices and lower US Treasury yields, but the near-term bias remains tilted to the downside despite only moderate momentum.
- Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council.
- Gold could not sustain the post-NFP bull run past the $4,200 mark per troy ounce, receding toward the $4,180 region at the end of the week.
- UBS sees gold reaching $5,400 by September 2027 despite near-term Fed pressure, citing debt risks, a weaker dollar, and central-bank demand.
- Gold is trading near 4,360 USD per ounce on Friday after gaining almost 2% in the previous session, but any failure to defend the $4,200 level would signal that the broader downtrend is resuming.
- Market participants have been pricing out the possibility of a rate hike at the late-October Fed meeting, though expectations for a 25-basis-point increase in December remain firmly on the table.
What's still developing
- Nevertheless, the aforementioned factors make it prudent to wait for strong follow-through buying before confirming that the XAU/USD has formed a near-term bottom.
- This keeps the geopolitical risk premium firmly in play.
- USD/JPY is struggling for fresh impetus near 158.00, moving away from the top end of its weekly range in the Asian session on Friday, after hotter-than-expected Tokyo CPI and amid a broad US Dollar retreat.
- Dale also analyzes what the bounces in gold, silver, and copper may signal and covers stock indices poised to reach new all-time highs.
- On the topside, initial resistance is located at the 100-day MA around $4,325, with the Bollinger mid-line reinforcing a higher barrier near $4,440 and the upper band further up around $4,685, levels that would need to be reclaimed to ease the current bearish tone.
- In the daily chart, XAU/USD stays capped below the 100-day Moving Average (MA) and the Bollinger Bands’ 20-period simple moving average (SMA), keeping the near-term bias tilted to the downside despite only moderate momentum, with the Relative Strength Index (14) hovering around 42 and pointing to lingering bearish pressure rather than capitulation.
- The US Dollar, for instance, eased from near an 18-month high on profit-taking, despite hawkish FOMC minutes and escalating tensions in the Middle East.
- Gold steadies after the Fed raises rates to 3.75%–4.00%.
- Apart from this, Fed Chair Kevin Warsh's speech at the annual meetings of the IMF and World Bank in Bangkok on Friday would drive the USD and the non-yielding Gold.
- The heat map shows percentage changes of major currencies against each other.
- A failure to defend that floor would signal that the broader downtrend is resuming and set the stage for a slide further below the $4,000 psychological mark. (The technical analysis of this story was written with the help of an AI tool.
- US President Donald Trump on Wednesday demanded the US central bank slash interest rates to 1% “or less,” hours after the Fed announced its first rate hike since 2023.