Trending
Gold
Source: Newsmaker.id
Gold (XAU/USD) traded around US$4,011 per troy ounce early this week (October 26), climbing back above the psychological US$4,000 level after previously hitting a three-month low. This recovery was supported by a weakening US dollar and a decline in oil prices, following US President Donald Trump’s statement that he would not launch a direct attack on Iran in the near term. Nevertheless, the upside potential for gold remains limited due to the Federal Reserve’s policy stance.
US economic data indicates that manufacturing activity remains robust. The manufacturing PMI for October rose to 56.0—its highest level in 53 months—surpassing expectations of 55.6. Meanwhile, the services PMI stood at 57.9, and the composite PMI dipped to 57.6. The output price index climbed to its highest level since August 2022, suggesting that inflationary pressures may persist, which could reinforce expectations for further tightening by the Fed.
In the energy sector, oil prices have climbed to their highest level since September 16, driven by supply concerns following attacks in Saudi Arabia and escalating tensions with Iran. The Iran-backed Houthi group has also declared its intention to continue targeting King Khalid International Airport in Riyadh. These conditions sustain a geopolitical risk premium, which may limit any decline in the US dollar—a traditional safe-haven asset.
Market focus has now shifted toward the Federal Open Market Committee (FOMC) decision on Wednesday. In the absence of major new economic data, investors will closely scrutinize the policy statement and comments from the Fed for clues regarding the future direction of interest rates. The market will also face policy decisions from other central banks—including the RBNZ, the ECB, and the Bank of Japan—which could increase volatility for gold.
Furthermore, US third-quarter GDP figures and the PCE Price Index, due on Thursday, will be critical data points for gold’s trajectory. The PCE, in particular, is a key focus, as it is closely linked to the Federal Reserve’s inflation target. Given the combination of inflationary pressures, energy prices, monetary policy, and geopolitical risks, the current rebound in gold is not yet sufficient to confirm that the downward trend has come to an end. (srh)
Source: Newsmaker.id