In a recent development, the price of gold (XAU/USD) faced a downward pressure as it retreated from the $2,006 mark during early Asian trading on Thursday. The renewed demand for the US Dollar, driven by an upbeat US consumer sentiment report, led to an increase in US Treasury yields. Consequently, gold attracted some sellers, losing its recovering momentum. The subdued market conditions ahead of the Thanksgiving Day holiday in the United States also contributed to the fluctuations in gold prices, which currently hover around $1,990, showing a minimal 0.02% increase for the day.
The US Dollar Index (DXY), which measures the USD against a basket of major global currencies, remains around 103.88, indicating the strength of the US currency. Furthermore, the rise in US Treasury yields, particularly the 10-year yields climbing by 4.40%, negatively impacted the yellow metal. The higher yields serve as an opportunity cost for investors holding non-yielding assets like gold.
The University of Michigan Consumer Sentiment Index for November demonstrated an improvement, rising to 61.3 from the initial reading of 60.4. This marked its fourth consecutive monthly rise. Additionally, the 1-year inflation expectations increased to 4.5% from the preliminary 4.4%. The 5–10 year inflation expectations remained steady at 3.2%.
Notably, Durable Goods Orders experienced a decline of 5.4% month-on-month in October, following a 4.6% rise previously. Meanwhile, in the labor market, Jobless Claims for the week ending November 17 unexpectedly fell to 209,000, marking the most substantial drop since June. Continuing Claims also decreased to 1.84 million compared to the previous 1.862 million.
During the November Federal Open Market Committee (FOMC) Meeting Minutes on Tuesday, it was revealed that all participants agreed to proceed with caution, making policy decisions based on incoming information, economic outlook, and risk evaluation.
Looking ahead, gold traders are keeping a close eye on the US S&P Global PMI data, set to be released on Friday. The Manufacturing PMI is expected to rise to 49.8, while the Services PMI is estimated to grow to 50.4. These figures hold the potential to provide clear direction and fresh impetus for the gold price.
By monitoring the USD’s performance, US Treasury yields, and upcoming economic data, traders will be able to navigate the fluctuations in gold prices with increased insight and adapt their strategies accordingly.