Gold Should Have Crashed, But Instead, It Only Slid a Bit... What's Going On?
Gold prices moved slightly lower during the Asian session on Friday, but the decline was limited and remained within the same range throughout the week. The main pressure came from the delayed release of the US September Non-Farm Payrolls (NFP) data, which tended to be positive, reducing market expectations that the Fed would cut interest rates again at its December meeting. Because gold offers no yield, the diminishing likelihood of a rate cut automatically dampened buying interest in this precious metal.
Meanwhile, the US dollar's strengthening began to slow after previously approaching its highest level since May. Market participants were concerned that the US economic momentum would weaken due to the prolonged government shutdown, preventing the dollar from continuing its upward movement. These concerns about the economic outlook have prompted some investors to seek safe assets, helping to contain selling pressure on gold.
Cautious sentiment in global stock markets also supported gold's role as a safe-haven asset. Under these conditions, gold's short-term downside room appears limited, and market participants seeking to push XAU/USD further should exercise caution. Currently, gold is likely in a consolidation phase: pressured by fading expectations for a Fed rate cut, but supported by concerns about economic growth and weak risk appetite in the market. (asd)
Source: Newsmaker.id
