FX.co ★ Der | XAU/USD, GOLD

Gold prices (XAU/USD) fell on Thursday, registering a decline of more than 1.20%. A sharp decline in US stock prices has prompted investors to shift towards defensive stocks and value stocks instead of holding non-yielding precious metals. Gold prices touched their lowest level during the day at $4,005 before settling around $4,016 per ounce. A series of strong US economic data added pressure on gold prices, boosting market expectations that the Federal Reserve may raise interest rates in December. It is worth noting that as gold prices fell, the dollar index (DXY) - a measure of the value of the dollar against six major currencies - also fell slightly, by 0.12% to 102.03. The dollar fell in light of the Federal Reserve's decision to keep interest rates unchanged, and the lack of clear guidance from Federal Reserve Chairman Kevin Warsh during the meeting. At the press conference, Fed Chairman Warsh announced a radical restructuring of the FOMC meetings: starting in 2027, the Council will hold eight meetings per year, one of which will be devoted to discussing long-term monetary policy strategy; By 2028, the number of meetings responsible for setting interest rates will be reduced to six. Following the Fed's decision, the money market initially expected an 84% probability of a 25 basis point rate hike at the next meeting. According to Prime Terminal data, this probability was later revised to 81%. Although gold prices briefly rebounded to around $4,035 per ounce, they quickly declined as macroeconomic data highlighted the economy's resilience and continued inflationary pressures. Preliminary US GDP figures for the third quarter showed an annual growth rate of 3.4%, well ahead of market expectations of 3.2% and accelerating from the 2.2% growth rate in the second quarter. Meanwhile, the Fed's preferred inflation index - an index of core personal consumption expenditures prices - rose 3.1% year over year, in line with market expectations, underscoring that the Fed's mandate to maintain price stability has yet to be achieved. This hardening trend has been reinforced by continued strength in the US labor market: Initial jobless claims fell to 194,000 in the week ending October 24, lower than the expected 199,000 claims and slightly lower than the previous week's 195,000 claims. On the geopolitical front, tensions in the Middle East began to show signs of easing, as US Vice President JD Vance reached out to Secretary of Iran's Supreme National Security Council Mohsen Rezaei and sought to resume peace talks, reducing gold's safe-haven appeal. Although supply concerns eased, leading to a decline in oil prices, gold did not achieve a significant recovery amid expectations of higher interest rates. Meanwhile, the yield on the benchmark 10-year US Treasury note rose after hitting an intraday low of 4.949%, and is currently sitting at around 4.999%. Moreover, market uncertainty surrounding the November 3 US congressional elections helped keep gold trading within a lower range. Looking ahead to next week, investors will face a flurry of economic data, including the Institute for Supply Management's manufacturing and services PMIs, factory orders, JOLTS report, weekly initial jobless claims, and the important October nonfarm payrolls report. Technically, the price action of spot gold (XAU/USD) on the daily chart indicates a clear control of sellers in the market. The price of gold fell below Wednesday's low of $4,025; A further drop below the key psychological level at $4,000 could lead to a test of last week's low at $3,975. The 14-day Relative Strength Index (RSI) continues to decline and is approaching the oversold zone, confirming the continuation of downside momentum. Conversely, if buyers want to regain control of the short-term trend, gold prices must first break the key resistance level at $4,100; If this materializes, gold prices are expected to rise to US$4,200 and then challenge the 100-day and 50-day simple moving averages (SMAs), which currently stand at US$4,217 and US$4,269, respectively.