Gold Price stays defensive within multi-day-old falling wedge after snapping four-week downtrend.
Mixed United States data, pullback in Treasury bond yields lure XAU/USD buyers within bullish chart pattern.
Federal Reserve Chairman Jerome Powell, other policymakers defend hawkish bias but cite data dependency to prod Gold bears.
Fed’s preferred inflation gauge, NFP will guide US Dollar and can favor XAU/USD rebound on downbeat outcomes.
Gold Price (XAU/USD) edges higher to around $1,915 as it defends the first weekly gain in five while marking no major surprises to begin the trading week. That said, the XAU/USD cheered a pullback in the United States Treasury bond yields, as well as the mixed statements from the major central bank officials at the annual Jackson Hole Symposium, to recall the buyers after their four-week absence. However, the cautious mood ahead of this week’s top-tier inflation and employment clues from the United States prods the Gold Price upside amid the initial hour of Monday’s Asian session.
Gold Price recovers even as Powell’s speech defends hawks
Gold Price cheered a pullback in the United States Treasury bond yields despite hawkish Federal Reserve (Fed) remarks in the last week. Additionally, mixed US data also allowed the XAU/USD buyers to remain hopeful.
During the last week, the softer prints of the US Purchasing Managers Index and Michigan Consumer Sentiment Index contrasted with mixed details of Durable Goods Orders, mid-tier activity data and inflation expectations. However, hawkish comments from Federal Reserve (Fed) Chairman Jerome Powell at the annual Jackson Hole Symposium helped the US Dollar Index (DXY) to post the fifth consecutive weekly gain while poking the three-month high.
That said, Fed’s Powell reiterated his defense for “higher for longer” rates while stating that the policy is restrictive but the Fed can’t be certain what neutral rate level is. The policymaker also added that there is substantial further ground to cover to get back to price stability while also stating that the economic uncertainty calls for agile monetary policy-making.
Apart from Powell’s speech, the comments of Federal Reserve Bank of Cleveland President Loretta J. Mester also appeared hawkish as she warned that the under-tightening would be worse than overtightening. The policymaker also added, “We are getting close to where we need to be with rates.”
Further, Federal Reserve Bank of Philadelphia President Patrick Harker told Bloomberg that he doesn't see the need now for additional rate increases but added that he could call for more hikes if inflation retreat stalled.
It should be noted that the policymakers from the rest of the major central banks, including the European Central Bank (ECB), Bank of England (BoE) and the Bank of Japan (BoJ), also appeared cautiously hawkish and hence allowed the Gold buyers to stay hopeful.
That said, the US Dollar Index (DXY) rose for the fifth consecutive week but the benchmark 10-year Treasury bond yields snapped the four-week uptrend by posting minor weekly losses as it retreated from the highest level since 2007.
Additionally, the slight improvement in the technology shares and mildly positive outlook of the overall equities market also prod the Gold Price downside.
It’s worth noting that the market’s preparations for US Commerce Secretary Gina Raimondo’s visit to Beijing, as well as China’s readiness for more stimulus, also lures the XAU/USD buyers due to the Dragon Nation’s status as one of the world’s biggest Gold customers
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