Gold faces headwinds as persistent inflation pressures support higher interest rates, driving bond yields and the U.S. dollar higher.
The gold market is struggling to maintain its recent recovery as persistent inflation pressures, elevated bond yields and a U.S. dollar trading near an 18-month high continue to create significant headwinds for the precious metal ahead of another critical week of economic data.
Central-bank diversification and a weak property and stock market are driving China's institutional and retail gold buying. The gold rush would help put a floor under bullion prices, even as the buoyant U.S. yields kept a lid on demand for the non-yielding precious metal.
Gold rose in early Asian trade, as markets weighed a pullback in oil prices.
The latest Kitco News Weekly Gold Survey showed Wall Street back on the brink of a bullish majority, while less than half of Main Street believed gold would gain next week.
Spot gold and silver prices were sharply higher in late U.S. trading Friday, as a softer dollar earlier in the session, a pullback from this week's Treasury-yield extremes and bargain buying helped metals recover from the midweek selloff.
Gold tests key resistance as a falling wedge points to a potential trend reversal, with a breakout opening the way toward $4,697 and a projected $4,821 target.
There is no denying that since early spring, gold has had a tough run. Rising bond yields and stubborn inflation, driving hawkish interest rate expectations, have made it difficult for the precious metal to attract any consistent momentum.
The gold market may not be ready to break out to the upside as it encounters initial resistance at $4,200 an ounce, but there is still optimism among analysts as prices manage to hold support above $4,100 an ounce ahead of the weekend.
The gold market is trading not far from session highs after the latest data showed consumer sentiment in the U.S. declining further, with inflation expectations rising higher.The University of Michigan announced on Friday that the preliminary reading of its Consumer Sentiment survey for October was 46.3. The data was worse than expectations, as the consensus forecast of economists called for a reading of 47.6, and it was also well below September's final reading of 48.1.
Gold edged higher in Asian trade. Sentiment is likely buoyed by expectations that the People's Bank of China will continue adding to its gold reserves, ANZ said.
Gold tests critical Fibonacci support at $4,103 as traders weigh the risk of further downside against a potential double bottom and bullish wedge breakout.