Gold Eyes PCE As the Turning Point for XAU/USD

Gold

Gold prices seem to be recovering in the Asia-Pacific trading as equity markets search for direction following a selloff in US yields. Bullion prices fell more than 1% throughout New York trading as stocks scaled down and the US Dollar moved higher. The Federal Reserve’s hawkish verdict on rate hikes has solidified in recent weeks,

On Monday, Cleveland Fed President Loretta Mester stated, speaking from the Massachusetts Institute of Technology, that the Fed should “act more aggressively. Further increases in our policy rate will be needed.” The 10-year Treasury yield rose to 3.931%, the highest point since April 2010. The US Dollar saw broad strength as well, gaining around 1%. Stronger US yields and a higher Dollar typically hurt gold’s appeal as an investment.

Gold speculators scaled back their recovery by 12k contracts for the week ending September 20, according to the CFTC’s Commitments of Traders (COT) report released on Friday, which accrued to the smallest position since June 2019. Traders are no longer purchasing the metal like before. \

The Personal Consumption Expenditures Price Index (PCE) for August is due later this week, on September 30. Analysts expect the core PCE components, excluding food and energy prices, to rise 4.7% annually in August.

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