Gold still under Jackson Hole hawkish effect

Gold price bounced from five-week lows on Monday, amidst a downbeat market mood, after last Friday’s hawkish remarks by Federal Reserve Chair Jerome Powell, spurred a fall in equities, propelling the greenback and US Treasury bond yields to fresh weekly highs. At the time of writing, XAU/USD is trading at $1740 slightly above its opening price.

Global central bank hawkish stances have remarkably weighed on market sentiment, a tailwind for gold price. Global equities are trading in negative territory. Since Wall Street opened, the US Dollar Index is almost flat exchanging hands at 108.831, a tailwind for the non-yielding metal, which is up by almost 0.80%, despite climbing US Treasury yields.

US 10-year Treasury yield stays edges up almost eight bps, sitting at 3.119%, at a time that market players expect that the US Federal Reserve would hike 75 bps. On Monday, there is a light calendar keeping market participants reflecting on the Jackson Hole symposium and particularly Jerome Powell’s hawkish speech.