Gold surges to a seven-month high, amid Powell’s comments

Reacting to Fed Chair Jerome Powell’s speech, the price of gold immediately surged to a new multi-month high of $2060.62. The precious metal even extended its gains later on the day and is trading at 2071.15 per ounce at the time of writing, gaining $35.05, and thereby up by 1.72%.

Gold’s attractiveness as a hedge is increased by Federal Reserve Chair Jerome Powell’s comments regarding weak inflation data and high core inflation. According to money market futures, US interest rate expectations currently include nearly 135 basis points of Fed rate cuts by the end of 2024.

Gold price extended to a new seven-month high in the mid-North American session after the US Federal Reserve Chair Jerome Powell welcomed recently revealed soft inflation data, though stressed core inflation “is still too high.

During a Q and A session, Fed Chair Powell said, “Wed (Fed) are getting what we wanted to get,” giving a green light on bullion traders, which took advantage of XAU/USD’s dip to the $2044.50 area, before jumping to new day and multi-month highs.

Meanwhile, US Treasury bond yields are plunging, with the 10-year benchmark note coupon dropping six and a half basis points, at 4.263%, after reaching a high of 4.349%, a tailwind for Gold prices.


Consequently, the Greenback tumbles, as revealed by the US Dollar Index, which measures the currency against six peers, down 0.24%, at 103.26.

In the meantime, money market futures show investors are expecting close to 135 basis points of Fed rate cuts for the end of 2024.

The Manufacturing PMI for November, released earlier on Friday by the Institute for Supply Management (ISM), indicated that business activity is still contracting for the thirteenth consecutive month. In line with the most recent data on unemployment claims, manufacturer prices increased as the employment index decreased.

Gold prices are rising quickly as buyers target the all-time high of $2081.82. It should be noted that, aside from the $2060 and $2070 areas, no other resistance levels are in the works. After eliminating those psychological barriers, achieving the ATH would be possible. On the other hand, the daily high of November 29 at $2052.13 serves as the first level of support before it opens up to the daily low of November 30 at $2031.58.