XAU/USD Dips to $1850 as Fed Williams’ Speech Eyed

XAU/USD prices have recovered back to trading flat on the day, having at one point prior to the U. S. open been trading with losses of nearly 1.0%.

Gold appeared to find good demand at $1850 as gold bulls and those seeking inflation protection bought the dip.

As Fed encounters pressure to respond to inflation, a speech from influential Fed Board of Governors member and NY Fed President John Williams will be closely watched by investors and traders.

If Williams continues to emphasize that the Fed is willing to be patient with regard to rate hikes and that the bank continues to believe the spike in inflation to be transitory, this may exacerbate fears that the Fed is making a dovish mistake. This would likely help gold finish the week with a burst.

Prices got a small boost at 1500GMT in wake of the release of the University of Michigan Consumer Sentiment survey for November and the JOLTs Job-Opening report.

The data showed sentiment hitting decade lows as consumers despaired over persistent inflationary pressures, while the job-related data showed that in September, the number of job opening exceeded the number of unemployed persons by a record 2.8 million and the quit rate hit a record high at 3.0% (both indicators of a very strong jobs market).

The strong JOLTs report adds to a growing mountain of evidence that inflation is going to remain above the Fed’s 2.0% target for quite some time; high labour demand equals high wage growth which leads to higher inflation.

Gold can challenge its prior weekly highs just shy of the $1870 level. At present, XAU/USD is close to $1860.