Gold (XAU/USD) Analysis, Prices, and Charts

• Powell not confident that the Fed has done enough to get inflation down to target.
• US 30-year bond sale floundered, sending yields sharply higher.

Federal Reserve Chair Jerome Powell sent risk markets spinning lower, and bond yields higher after he said that the US central bank was not confident that the current monetary policy was restrictive enough to bring inflation down to target (2%).

‘If it becomes appropriate to tighten policy further, we will not hesitate to do so,’ Powell said, before adding that the Fed ‘will continue to move carefully, however, allowing us to address both the risk of being misled by a few good months of data, and the risk of overtightening.’

In recent weeks financial markets have been pricing out further US interest rate hikes and Powell’s comments were seen as a reminder to the market that the Fed will do whatever is necessary if it believes that inflation will remain at elevated levels.

US Treasury yields jumped sharply higher late Thursday after a USD24 billion 30-year bond sale met with tepid demand. The lack of demand left primary dealers holding nearly 25% of the sale on their books, a substantially higher percentage than usual. The yield on the bond jumped around 17 basis points to 4.80% after the results came out, wiping out this week’s move lower in longer-dated yields.

US Treasury 30-Year Yield Daily Chart

Chair Powell’s hawkish commentary and the move higher in US Treasury yields are weighing further on the price of gold. After hitting a multi-month peak of $2,009/oz. on October 27th, the precious metal has drifted lower and now changes hands at $1,950/oz. A prior level of resistance around $1,961/oz. is now back in play with the 23.6% Fibonacci level at $1,971/oz. the next level of resistance. A zone of support between $1,932/oz. and $1,940/oz. should hold in the short term.

Gold Daily Price Chart – November 10, 2023

Charts via TradingView

IG Retail Trader data show 59.79% of traders are net-long with the ratio of traders long to short at 1.49 to 1.The number of traders net-long is 2.46% lower than yesterday and 1.70% higher than last week, while the number of traders net-short is 1.33% higher than yesterday and 1.42% higher than last week.

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https://www.dailyfx.com/news/gold-xau-usd-slips-lower-after-fed-powell-s-warning-ust-30-year-bond-sale-flop-20231110.html