Gold’s gains pared after Fed speakers’ hawkish comments

The Gold Index, XAU/USD, advanced to $1,980 after hitting $1,995 earlier in the North American session.

US housing data for October surprised to the positive side. Notably, the most recent spike in the price of precious metal was suppressed by hawkish Fed speakers and rising US yields.

Gold saw a minor increase during Friday’s trading session as well, peaking at $1,995 and currently trading at $1,980. Fed officials’ hawkish remarks following the release of positive US housing data, which spurred a small increase in US Treasuries, prevented the price increase.

The US Census Bureau released its monthly data on Friday. It showed that Housing Starts rose 1.9% in October compared to September’s revised 3.1% increase, and Building Permits rose 1.1% during the same period after declining 4.5% in September.
The President of the Federal Reserve Bank of Boston, Susan Collins, said on Friday that she was pleased to see the most recent slowdown in inflation and that she continues to see evidence that the financial environment is still favourable for the Fed.

The markets appeared alarmed when she went on to say that she wouldn’t rule out further firming.

The US bond yields are observed to be slightly higher elsewhere. The yield on the 2-year note is 4.91%, while the yield on the 5-year and 10-year notes is 4.46% and 4.45%, respectively. In terms of expectations, the markets are still pricing in the possibility of a December Fed no-hike.

The XAU/USD shows a bullish bias on the daily chart, with indicators that are still in positive territory even though they are slowing down a little.