- Gold price falls to new two-year low below $1,670.
- Expectations that the Fed will continue to tighten its monetary policy weighed on the yellow metal.
- US retail sales continue to show the strength of the US economy.
the price of gold falls below the psychological level of $1,700, reaching a new two-year low at $1,665.30, due to expectations that the US Federal Reserve will continue to tighten monetary conditions, causing a rise of US Treasury yields. Therefore, the USD continued on its way, but trimmed previous gains. At the time of writing, XAU/USD is trading around $1,666/troy ounce.
Gold price falls on rising US Treasury yields.
US Treasury yields rose on expectations that the Fed could raise rates by 75-100 basis points. The 2-year US bond yield, the most sensitive to rate hikes, peaked at 3.84%, while the 10-year Treasury bond yield stood at 3.437%, gaining three basis points. Notably, the yield curve inverted further, with the spread between 2-year and 10-year bonds widening to -0.403%.
US retail sales for August, released by the US Commerce Department, surprisingly rose, after falling a month earlier, with readings rising 0.3%, beating estimates of -0.1%.
Meanwhile, US economic data released by the Labor Department showed that initial jobless claims for the week ending September 10 were 213,000, down from the week’s reading. above and is lower than estimates of 227,000.
Manufacturing indices from the New York and Philadelphia Fed showed mixed results. New York’s Empire State manufacturing sector improved but remained on the contraction side, while the Philadelphia Fed index fell to the contraction side after rallying in the August report.
Gold (XAU/USD) Key Technical Levels
Source: Fx Street
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