- The price of Gold falls below $1,920 on Thursday.
- The 10-year US Treasury yield hit new multi-year highs above 4.5%.
The price of Gold (XAU/USD) plummets in the second half of the day and registers a new six-day low below $1,920. At the time of writing, XAU/USD is down 0.6% on the day and is trading at $1,918.50.
On Wednesday, XAU/USD rose towards $1,950 before making a sharp 180º turn late in the American session. Although the Federal Reserve left the policy rate unchanged at 5.25%-5.5%, as expected, following the September policy meeting, hawkish revisions to the Summary of Economic Projections triggered a recovery in US yields and they weighed on the price of Gold.
The dot plot confirmed that the US central bank intends to raise the policy rate by another 25 basis points in 2023 and showed that policymakers expect a total of 50 basis points of rate cuts in 2024, compared to 100 basis points on the June dot chart.
Following a quiet European session, the US 10-year Treasury yield has regained its traction and rose above 4.5% for the first time since November 2007, forcing XAU/USD to hold down.
Meanwhile, the Bank of England went against market expectations of a 25 basis point rate hike and kept its policy rate steady at 5.25%. The sharp drop in GBP/USD following this decision showed that the USD managed to capture capital outflows from the Pound. In turn, the USD gains additional strength and causes a new decline in XAU/USD.
Gold technical levels to take into account
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
