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Gold
Source: Newsmaker.id
The price of gold (XAU/USD) remained below US$4,100 per troy ounce during the European trading session on Thursday (October 22), even as the US dollar and US government bond yields continued to weaken. While these conditions should have provided room for a rebound, the precious metal has struggled to gain momentum, weighed down by concerns over inflation and the potential for interest rate hikes.
Expectations regarding Federal Reserve policy remain a primary source of pressure. Several Fed officials have signaled that there is no immediate urgency to raise interest rates during the October 27–28 meeting; however, persistent, strong US inflation data has led the market to continue anticipating a rate hike in December.
Inflationary concerns have intensified alongside continued volatility in oil prices. Rising energy costs could exacerbate price pressures, potentially prompting the Fed to maintain a restrictive monetary policy for longer. This environment is unfavorable for gold, as higher interest rates increase the opportunity cost of holding non-yielding assets.
Geopolitically, tensions in the Middle East remain a focal point. Iranian Foreign Minister Abbas Araghchi stated that while Tehran remains open to diplomacy, the prospects for progress in talks with Washington appear limited. Meanwhile, reports suggesting that the US and Israel may be preparing for potential military operations against Iran—following the US midterm elections—could sustain demand for the US dollar as a safe-haven asset.
The future trajectory of gold will depend heavily on upcoming US economic data. Investors are awaiting the release of Initial Jobless Claims on Thursday and global PMI data on Friday, which will provide fresh insight into the state of the economy and potential shifts in Federal Reserve policy.
Newsmaker Analysis: Gold continues to face fundamental pressure, despite the weakening of the US dollar and bond yields. As long as oil prices remain elevated and expectations for a December interest rate hike persist, the scope for a rebound in gold prices is likely to remain limited. However, weaker US economic data or a reduction in expectations for Federal Reserve tightening could serve as a catalyst for gold to strengthen once again. (srh)
Source: Newsmaker.id