Gold prices posted modest gains of over 0.40% on Thursday, with XAU/USD trading at $4,175, up 0.4% as US Treasury yields declined following Wednesday's inflation data release [1]. The Federal Reserve's preferred inflation measure, the Core Personal Consumption Expenditures (PCE) Price Index, was reported at 3.4% year-over-year, unchanged and below forecasts of a 3.3% jump, prompting traders to expect a near 70% chance of an interest rate hold for the October Fed meeting, while odds for a December rate hike stand at 83% according to Prime Terminal [1]. Despite these developments, the US Dollar Index (DXY) rose 0.61% to 102.08 [1].
Fed officials, including Vice Chairman Philip Jefferson, commented that the economy is near maximum employment and emphasized patience regarding rate adjustments, while Minneapolis Fed President Neel Kashkari maintained a hawkish stance, calling for additional hikes [1]. On the data front, the US ISM Manufacturing PMI for September ticked lower from 54.6 to 54.5, missing forecasts of 55. The Prices Paid sub-component increased sharply from 71.1 to 77.1, indicating rising inflationary pressure, and the employment index advanced from 51.2 to 52.7 [1]. US jobless claims for the week ending October 26 were 197K, below forecasts of 200K and down from the previous week's 198K [1].
Technical analysis shows Gold facing strong resistance at $4,200 after a breakout to the downside of a potential Bullish Wedge, which, once negated, opened the door for further losses. Momentum is moving in favor of buyers, but overall sentiment remains bearish as the Relative Strength Index (RSI) is below the 50 neutral level. For a bullish continuation, XAU/USD must reclaim the $4,200 mark [1].
Looking ahead, the US economic calendar includes the September Nonfarm Payrolls report and additional Fed remarks, which could further influence market direction. Traders are advised to expect further downside in Gold, but the rise of US Treasuries and lower yields remain a tailwind for the non-yielding metal [1].
CONCLUSION
Gold has managed to rise modestly despite a stronger US Dollar, supported by falling Treasury yields and reduced expectations for an imminent Fed rate hike. However, technical resistance and bearish momentum suggest caution, with upcoming US economic data and Fed commentary likely to drive further market moves.