🥇 GOLD drops below $1,950 per ounce

3:02 pm 10 November 2023

Precious metals are pulling back as Powell's hawkish comments pressure markets

A risk-averse moves can be spotted on the global financial markets today with European stock market indices dropping 0.5-1.5%. This is a response to a rather poor Wall Street session yesterday with major US stock benchmarks dropping 0.6-1.7%. Declines on Wall Street, in turn, have been triggered by hawkish comments from Fed Chair Powell yesterday as well as a weakish 30-year US bond auction. Resulting pick-up in market rates is pushing precious metals lower today.

Fed Chair Powell said yesterday that he is not certain whether Fed's stance is restrictive enough, adding that the bank will not hesitate to hike rates further should inflation development require it. While the money market still does not see any rate hikes soon, full pricing of the first rate cut was pushed back from June 2024 to July 2024. An hour before Powell hit the wires, the 30-year Treasury auction was held. A bid-to-cover ratio dropped to 2.24, the lowest since December 2021, suggesting that demand for bonds remains weaker than hinted by recent market moves.

Gold is trading 0.5% lower today, silver declines 0.6% and platinum drops 1.3%. Palladium is top laggard with a 3.7% drop with price freefalling after yesterday's drop below psychological $1,000 per ounce level. Taking a look at GOLD chart at D1 interval, we can see that precious metal erased all of yesterday's gains and is trading below $1,950 per ounce. Should price continue to fall and gold closes today's trading below the $1,950 support zone, it could be a hint that deeper declines may be looming.

Source: xStation5

The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.

Share:
Back

Join over 1 600 000 XTB Group Clients from around the world.