Gold Slips as Q4 Begins; Breaks Free from a Narrow Range

Published on Oct 04, 2023 15:15

Mild losses were seen in the yellow metal today, trading down by $3 an ounce, after falling to as low as $1930.90 yesterday. It has been hovering at its weakest levels in seven months due to constant pressure from a strong dollar and surging Treasury yields. Investors are closely monitoring comments from Federal Reserve officials for policy insights, alongside the upcoming US monthly jobs report.

The US dollar reached a ten-month high against global currencies, while the 10-year US Treasury yield surged to its highest since 2007, driven by robust US economic data. Factors like a higher-than-expected number of job openings in the JOLTS report and a slight improvement in the ISM Manufacturing PMI contributed to the dollar`s strength. Furthermore, news of a temporary 45-day government funding agreement by US lawmakers further weighed on gold prices.

Gold market was locked in a tight consolidation phase and was trading in a remarkably tight trading range since June of this year. The prices had been oscillating within the confines of a mere $110 range that is between $2,010 and $1,900. Finally the breakout has come and the metal broke past the range falling to $1930 levels.

To provide some context, the first quarter of the year saw a range of $204 for gold, while the second quarter had a range of $185, and the third quarter had the lowest range at $148. As we enter the final quarter of the year, it will be interesting to see how gold performs after this recent breakout from the previous range. Investors will be watching closely to see if gold can establish a new trend or if it will continue to trade within a narrow range.