Showing the New York session
XAU/USD
Next analysis lands in 6 hours.
Where we are
Gold is trading at 4182.5, up 1.22% on the day. This move has pushed the yellow metal higher than its previous New York close, reversing some of the pressure seen earlier in the week. The overnight range has seen a clear upward bias, building on the momentum that has carried through from the European session.
What's driving it
The primary driver for gold's current strength appears to be a softening in US real yields. The US 10Y Real Yield has ticked up to 2.92% as of October 7th, but the preceding days saw a downward drift, which is gold-supportive. This move is being amplified by signals from Fed speakers. While not a direct policy statement, Fed Governor Waller's comments on the "Signaling Value of the Summary of Economic Projections" yesterday at the Istanbul Economic Forum are being interpreted by the market as potentially less hawkish than some had feared, offering a tailwind to bullion.
US 10Y Real Yields are currently at 2.92% but have shown a tendency to move lower in the immediate preceding days, providing a supportive backdrop for gold.
Fed Governor Waller's speech yesterday, focusing on the signaling value of the SEP, is being interpreted as a subtle shift away from aggressive tightening signals.
Speculator positioning remains moderately long, with net non-commercial contracts at +218,632, suggesting some room for further upside if sentiment continues to improve.
VS PREVIOUS SESSION
Reversing earlier weekly pressure. Building on momentum.
NY session watch
The focus for the New York session will be on the Preliminary University of Michigan Consumer Sentiment and Inflation Expectations data at 10:00 ET. These figures will provide insight into the consumer's view on the economy and price pressures, potentially confirming or challenging the current narrative around inflation and Fed policy. If sentiment deteriorates and inflation expectations remain sticky or rise, it could reinforce the view that the Fed may need to maintain a cautious stance, which would typically be gold-supportive. Conversely, a sharp improvement in sentiment and a fall in inflation expectations could lead to a repricing of Fed cuts, putting pressure on gold. The biggest risk to the prevailing narrative today would be a significantly weaker-than-expected consumer sentiment print, which could spark renewed safe-haven demand for the dollar and weigh on gold, despite the current real yield backdrop.
TODAY'S EVENTS
HEADLINES
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