Gold retreats ahead of US data, pressured by high US yields

• Gold holds just below its opening price, constrained by US 10-year Treasury yield rising to 4.272%.
• Traders await US Nonfarm Payrolls, Q3 GDP, and the PCE Price Index, which could influence the Fed’s policy outlook.
• Political and geopolitical tensions linger as election polls narrow; though Israel’s conflict with Iran woes begin to fade.

Gold traded slightly below its opening price at the beginning of the week and is down by 0.15%, weighed down by rising US Treasury yields. Market players prepare for a busy economic docket in the United States (US), as the data will be crucial with investors looking for cues for the Federal Reserve’s (Fed) monetary policy path.

The XAU/USD trades at $2,742 after hitting a daily high of $2,747. The yield on the US 10-year Treasury note continued to climb, up by three basis points at 4.272%. This has kept Bullion prices from recording a new all-time high above $2,758 as some analysts eye the $2,800 mark toward the end of the year.

Meanwhile, traders are also eyeing the November 5 US election. According to polling site FiveThirtyEight, Trump’s chances of winning the US election have increased to 52% compared to 48% for Vice President Kamala Harris. Despite this, the Democratic nominee still holds a slight lead in most national polls.

Traders are also awaiting a busy economic schedule, which will feature a tranche of job data: JOLTS, ADP Employment Change, Initial Jobless Claims, and Nonfarm Payrolls.

Other data will be revealed like the Gross Domestic Product (GDP) for the third quarter of 2024, the ISM Manufacturing PMI, and the Fed’s preferred inflation gauge — the Personal Consumption Expenditures (PCE) Price Index.

Aside from this, geopolitics came back to the fore over the weekend after Israel launched missiles at several military targets in Iran, avoiding energy and nuclear facilities.

It’s worth noting that Fed officials are in blackout mode as they prepare for the November 7-8 meeting. They will break that period once Chair Jerome Powell  speaks at his press conference.

Daily digest market movers: Gold price dips ahead of busy US docket

• The US Dollar Index (DXY), which tracks the Dollar’s value against a basket of six currencies, is flat at 104.27.
• On Tuesday, the US schedule will feature the JOLTS Job Openings report for September, which is expected to show a dip from 8.04 million to 7.99 million.
• At the same time, the Conference Board (CB) is expected to release October’s Consumer Confidence reading, which is likely to improve from 98.7 to 99.3.
• The US Bureau of Economic Analysis will reveal Wednesday’s GDP for the third quarter. Estimates suggest the economy grew 3% QoQ, unchanged compared to 2024’s second quarter.
• The Atlanta Fed GDP Now model suggests the economy grew by 3.3% in Q3 2024.
• Data from the Chicago Board of Trade, via the December fed funds rate futures contract, shows investors estimate 49 bps of Fed easing by the end of the year.

XAU/USD technical outlook: Gold price drops below $2,750

Gold price uptrend remains intact with no reversal pattern around record highs, though it has consolidated within the $2,700-$2,750 area. A breach of the top of the range will immediately expose the all-time high at $2,758. Once surpassed, the next stop would be the $2,775 area before challenging $2,800.

On the other hand, if sellers move in and push prices below $2,700, the first support would be the September 26 swing high, which turned support at $2,685, followed by the 50-day Simple Moving Average (SMA), which turned support at $2,603.

Momentum suggests the non-yielding metal could consolidate as the Relative Strength Index (RSI) remains bullish but aims lower. Until the RSI clears the latest peak, Gold could’ve had the chance to print record highs. Otherwise, beware of a pullback.