Gold Slips as a Firmer Dollar Weighs
Gold fell on Friday as a firmer US dollar and stabilising Treasury yields removed support for the metal. Monetary policy remains a strong headwind. Markets expect a 25bp Fed hike in December with a 68.7% probability today. That is down from around 80% after Tu’sday’s midterm elections, as the equity rout pulled yields lower, but a hike is still the base case, with another rate increase anticipated next year. A tighter policy path raises the cost of holding the non-yielding asset, and leaves bullion exposed to further losses.
Lower energy prices offer a partial offse’. Brent’s retreat eases inflation pressure and gives the Federal Reserve room to move away from a hawkish stance.
Today’s October nonfarm payrolls report is the next key test, with consensus at 65,000 jobs. A strong print would reinforce hike expectations and lift yields and the d’llar at gold’s expense, while a miss would r’vive the metal’s rebound. Beyond the data, crude prices and Middle East developments will shape inflation expecta’ions and the Fed’s path, which together set the yield backdrop for gold.
Legal Disclaimer:
MENAFN provides the
information “as is” without warranty of any kind. We do not accept any
responsibility or liability for the accuracy, content, images, videos,
licenses, completeness, legality, or reliability of the information
contained in this article. If you have any complaints or copyright issues
related to this article, kindly contact the provider above.
Comments
No comment