Gold Marked Sixth Day Of Losses After Powell's Slightly Hawkish Rhetoric -

Gold Marked Sixth Day Of Losses After Powell’s Slightly Hawkish Rhetoric

Nov 16, 2024Jeremy ParkinsonFinance0

The price of gold dipped below the $2,570 mark for more than a 4% weekly decline.

Jerome Powell indicated the Fed has remained cautious about cutting rates despite positive US economic indicators.

Investors have adjusted expectations for a December rate cut, with the likelihood dropping to 62% after Powell’s comments.

US Retail Sales showed growth while Industrial Production improved, despite remaining subdued.

Gold prices seemed to extend their losses for the sixth straight day on Friday, as the yellow metal appeared set to achieve weekly losses of over 4%, the largest since September 2023. Federal Reserve Chair Jerome Powell’s slight “hawkish” rhetoric lifted the greenback, which dented appetite for gold. At the time of writing, the XAU/USD currency cross was seen trading at around $2,564, down by approximately 0.17%.On Thursday, Fed Chair Jerome Powell said the central bank is in no rush to lower borrowing costs amid an ongoing strong economy, a solid labor market, and inflation standing above the 2% goal. Following Powell’s words, investors trimmed the chances of a 25 basis point (bps) rate cut by the Fed at the December meeting, with odds falling from 72% to 62%.Earlier, US Retail Sales for October expanded monthly and annually, with the former dipping slightly compared to September numbers. Recently, the Fed announced that Industrial Production for the same period improved but remained in contractionary territory.Although US data was positive, it undermined the dollar as market participants booked profits ahead of the weekend. This capped bullion’s losses after it hit a two-month low of $2,536. The US Dollar Index (DXY), which measures the greenback’s performance against a basket of six currencies, lost 0.10%, as it rested at the 106.76 figure.Meanwhile, US Treasury bond yields were also pressured ahead of the weekend, with the 10-year benchmark rate virtually unchanged at 4.43%.In addition to Powell’s words, Boston Fed Susan Collins said the US central bank does not urgently need to lower rates. Lastly, Chicago’s Fed Austan Goolsbee kept the central bank options regarding December’s meeting, adding, “The dispute on neutral rate could support slower cuts.”Market participants have seemed worried about Donald Trump’s tariff plans, which are inflation-prone at a time when the Fed is trying to control higher prices without tapping a deeper economic slowdown.Next week, bullion traders will look for Fed-speaking housing data, Initial Jobless Claims, and the release of S&P Global Flash PMIs.

Market Movers: Gold Steadied Alongside Strong US Dollar

Gold prices recovered as US real yields, which often inversely correlate against bullion, fell three basis points to 2.107%.

US Retail Sales in October increased by 0.4% month-over-month, slightly above the 0.3% forecast but lower than the 0.8% rise recorded in September. Yearly, sales grew by 2.8%, up from 2% previously.

Industrial Production contracted by -0.3% in October, in line with expectations, but showed an improvement from the -0.5% decline seen in September.

According to data from the Chicago Board of Trade via the December fed funds futures contract, investors have been pricing in 24 basis points of Federal Reserve rate cuts by the end of 2024.

XAU/USD Technical Outlook: Gold Price Remained Bearish; Sellers Targeted $2,550
Gold recently dipped below the Oct. 10 swing low of $2,603, intensifying losses past the $2,600 mark and briefly touching a two-month low of $2,536, just under the 100-day Simple Moving Average (SMA) at $2,545. Nevertheless, the inability of sellers to push prices toward the $2,500 mark seemingly allowed for a potential rebound.The first resistance level is $2,600. If buyers were to reclaim this level in the coming days, they may then target the 50-day SMA at $2,651, with further resistance around the $2,700 area. Exceeding this could pave the way to the Nov. 7 high of $2,710.The Relative Strength Index (RSI) moved away from its neutral line, indicating bearish momentum that could lead to further declines in the XAU/USD currency cross. More By This Author:Gold Slips On Powell Remarks Of No Rush To Lower Rates Gold Crashes As USD Surges, Focus On US Inflation Data Silver Price Forecast: XAG/USD Dropped Below $31.50, Weighed Down By US Dollar Strength