Gold Price Forecast: XAU/USD bulls eye a deeper bullish correction towards $1,675 – by fx_ross Gold Commodities DollarIndex
0 following a run from a low of $1,641.57 to the day's high of $1,664.89. The US dollar continued to ease despite bond yields rising and concerns rising interestwill lead to a global recession. Month-end flows could be the culprit that is moving out of a heavily committed play by long positioning of late.
What would usually be weighing on the price of gold, bond yields have been moving up amid rising interest rates. The US 10-year note's yield was last seen higher by some 0.37% to 3.7510%. The high of the day, however, was at 3.868%. To date, rising yields have weighed on the unyielding precious metal. However, its safe-haven allure has kicked in as market turmoil has led to an unwind of the greenback late in the month, falling sharply from a 20-year high.
However, as soft as the US dollar is in comparison to the recent highs, analysts at TD Securities still argue that ''The risk of capitulation remains prevalent for the yellow metal moving into an October with key labor market and inflation data on tap before the next Fed meeting.'' ''With prices trading below pandemic-era levels, a small number of family offices and proprietary trading shops are increasingly feeling the pressure to finally capitulate on their massively bloated and complacent length in gold. Rates markets are pricing the potential for higher interest rates to persist for some time, and a steady stream of Fedspeak is likely to hammer this point home,'' the analysts explained.
Meanwhile, on the day, data showed that Gross Domestic Product in the US fell at an unrevised 0.6% annualized rate in the second quarter. In other data, Initial Jobless claims for state unemployment benefits dropped to 193,000, versus expectations of 215,000 applications for the latest week.
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