On Wednesday (November 9), the international gold price fell from the high of $1,716.79 per ounce since October 6, which was set in the previous trading day, but the intraday price fluctuation range was relatively narrow. Cautious investors await U.S. inflation data due on Thursday (Nov. 10). In addition, the results of the US midterm elections may have a great impact on the future economic and fiscal policies of the United States.
At 15:24 Beijing time, spot gold sank 0.09% to US$1,710.69 per ounce; the main COMEX gold futures contract fell 0.12% to US$1,713.9 per ounce; the US dollar index rose 0.09% to 109.727.
Stephen Innes, managing partner of SPI Asset Management, said: “After the sharp rebound in gold prices, some bulls chose to take profits. If the US CPI data is higher than expected, the price of gold may fall below $1,690, otherwise it may break the level of $1,725.”
Investors will still focus on the upcoming US consumer price index report on Thursday (November 10). The performance of the data may influence the Fed’s stance on raising interest rates in the future. Economists expect the U.S. core consumer price index to slow to 0.5 percent and 6.5 percent on a monthly basis in December, respectively.
Traders now see the Fed raising rates by at least 50 basis points at its December meeting, but less than a 45% chance of a fifth straight 75 basis point hike. Gold is seen as an inflation hedge, but higher interest rates could undermine the attractiveness of the non-yielding asset.
Cautious market sentiment has provided some support for safe-haven gold and could limit further losses, at least for now. Investors turned cautious amid growing concerns about a further global economic downturn and uncertainty over the outcome of the U.S. midterm elections.
Risk sentiment turned cautious as markets expected a Republican victory in the House of Representatives and were divided over the outcome of the Senate election. According to the latest polling data in the United States, the issues that the American people are most concerned about in this mid-term election are the economy and inflation.
American media pointed out that the midterm elections may have a great impact on the future economic and fiscal policies of the United States. If the Republicans gain control of both houses of Congress in the midterm elections, it could change U.S. economic and fiscal policy.
In this regard, experts and entrepreneurs have very pessimistic outlooks on the US economy. Former Boston Fed President Rosengren said on the 8th that due to continued inflationary pressures, the Fed will be forced to raise interest rates to higher-than-expected levels, and a recession in the United States is very likely next year.
The United States will not release any important economic data that may affect the market during the day, and gold investors will get trading clues from speeches by New York Fed President Williams and Richmond Fed President Bar Jin.