The gold market exhibited a positive trajectory, with XAU/USD hovering around $1,925 during early Asian trading hours on Wednesday. The surge in the precious metal was supported by a correction in the US Dollar (USD), even as higher US Treasury yields posed potential constraints on the currency’s downside.
Tuesday’s release of robust US economic data, including a 0.7% month-on-month rise in US Retail Sales for September, indicated a strong momentum in consumer spending. However, the impact on the Greenback was short-lived, with Minneapolis Federal Reserve Bank President Neel Kashkari emphasizing that inflation remains a concern. Such dovish stances by Fed officials continue to influence market sentiment.
Attention now turns to key statements from several Fed speakers, namely Waller, Williams, and Bowman, which could offer insights into the future direction of monetary policy. Any hawkish remarks from these officials might boost the demand for the USD and exert pressure on commodities like gold.
Geopolitical tensions between Israel and Hamas further contributed to the bullish sentiment in the gold market, as the conflict heightened demand for safe-haven assets. Reports of an Israeli air attack causing significant casualties in Gaza underscored the precarious situation in the region.
Looking ahead, market participants are eagerly anticipating the release of Chinese Gross Domestic Product (GDP) figures for the third quarter, along with data on Industrial Production and Retail Sales, which could potentially impact gold prices. Traders are closely monitoring these events, seeking potential trading opportunities in response to the dynamics influencing the price of gold.