Investing.com – Gold liquidation and price declines appeared to slow for the first time in nearly two weeks on Tuesday after the yellow metal hit a 7-month low on rising US government bond yields and the accompanying strengthening of the dollar to its highest levels in 11 months.
Prices (Futures)
The price of the most actively traded gold futures contract on the New York Stock Exchange, COMEX, settled $5.70, or 0.3%, at $1,841.50 an ounce. Earlier in the session, December gold fell to $1,830.95, its lowest level since March. US gold futures prices fell 4% over the past week, their largest weekly decline since falling nearly 6% during the week ending June 11, 2021. Comex gold futures prices also concluded the third quarter of the year with a decline of 3%. % after a 4% decrease in the second quarter.
Spot prices
As for the spot gold price, which some traders follow more closely than futures, it was at $1,823.93 by 15:15 EST (19:15 GMT), down $3.95, or 0.2%. The session low was $1,815.32, the lowest since the cliff it reached in March.
And bonds in the face of gold
Bond yields and the dollar received a fresh boost after the US Labor Department reported earlier on Tuesday that the number of US job openings rose more than expected in August, taking away some of the confidence the Federal Reserve may have shown in its fight against inflation.
According to the Labor Department’s monthly job opening and trading report, the estimated number of available jobs rose to 9.61 million in August. In July, there were about 8.92 million jobs available. Wall Street economists specifically polled about 8.8 million jobs available for August.
This Labor Department report comes in advance of a more important September nonfarm payrolls report, which is scheduled to be published on Friday by the Labor Department. The Federal Reserve will follow this closely to help it make its rate decision. The central board has repeatedly said that jobs and wage growth must slow to help control inflation.
The Fed stops gold’s decline
The rapid rise in Treasury yields and the US dollar was somewhat mitigated by comments from prominent Fed policymaker Rafael Bostic, head of the Atlanta Fed.
Bostic indicated that the central bank is in no rush to aggressively increase interest rates for citizens in order to control inflation, although he stressed that a restrictive monetary policy will be necessary to prevent spending, job growth and salaries from deteriorating from the context of the overall economy. Bostic, who serves as president of the Atlanta Federal Reserve, hinted that it is possible that interest rates will be raised at the end of 2024.
Bostic’s words contributed to giving some comfort to commodity buyers, as he ruled out resorting to an aggressive interest rate hike scenario by the Federal Reserve. They were looking for relief from the fear resulting from the Federal Reserve’s aggressive policy, which once again dominated the investment world after a relative calm in the markets in the second quarter of the year. Bostic’s comments, ahead of an expected increase in interest rates in either November or December, come as a sign that the central bank may have finished raising new interest rates after implementing 11 increases between March 2022 and July 2023.
In addition to Bostic’s comments, the US dollar’s rise was curbed by intervention in the foreign exchange market by the Japanese government to support the yen, after a deal reached an all-time high.
While gold prices have seen a significant decline recently, they found some support after hitting a 7-month low. A continued rise in Treasury yields may put pressure on the gold price, but $1,830 could become a key support level. Investors are now awaiting the Non-Farm Payrolls (NFP) report, and with the long weekend approaching, the market may see some fatigue as Wall Street awaits this key economic data.
2023-10-03 22:40:00
#Urgent #Golds #collapse #calms #Federal #Reserve…and #futures #trading #Investing.com
