XAU/USD surges above $1,970 amid softer USD, Fed Powell’s dovish comments – Crypto News – Crypto News
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XAU/USD runs up to test critical resistance with eyes on a significant bullish breakout XAU/USD runs up to test critical resistance with eyes on a significant bullish breakout

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XAU/USD surges above $1,970 amid softer USD, Fed Powell’s dovish comments – Crypto News

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  • Gold price extends its upside for the fourth consecutive day.
  • The weekly Initial Jobless Claims dropped to 198K last week, the lowest level since January.
  • Fed Chair Jerome Powell signaled no further rate hikes by the Fed, which dragged the USD lower.

Gold price (XAU/USD) gains momentum to $1,978, the highest level since late July during the early Asian trading hours on Friday. The rally of the precious metal is bolstered by the decline of the US dollar (USD) following Fed Powell’s dovish comments and a safe-haven flow.

Meanwhile, the US Dollar Index (DXY), a measure of the value of USD against six other major currencies, consolidates its recent losses around 105.85. US Treasury yields edge higher, with the 10-year Treasury yield settling at 4.99%, the highest level since 2007.

The US job data on Thursday indicated the economy in the US remains solid. The weekly Initial Jobless Claims dropped to 198,000 for the week ending October 14, the lowest level since January. Existing home sales fell 2.0% MoM in September and 19% YoY, the lowest level since 2010. These numbers indicate that higher mortgage costs negatively impact housing market confidence.

Fed Chair Jerome Powell signaled a desire to pause rate hikes and watch how economic data develops in the coming months. Powell further stated that further tightening of monetary policy might be appropriate if there is more evidence about above-trend growth and a tight labor market. His comments dragged the USD lower broadly and boosted USD-denominated gold.

In the absence of top-tier economic data release from the US, market participants will keep an eye on the Fed officials’ speech, including Logan, Mester, and Harker. 

 

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