The price of gold is falling on high yields in the US as the conflict in the Middle East subsides

The price of gold falls on Wednesday amid heightened tensions between Israel and Iran.
ADP’s solid report on national employment changes could be a precursor to an confident NFP.
Friday’s Nonfarm Payrolls data is expected to show 140,000 in September. novel jobs in the USA.

Gold fell during the North American session on Wednesday, falling 0.50% on the day as investors watched Israel’s response to Iran’s attack on Tuesday. Geopolitics remains a factor driving investors, who have lifted gold prices after consecutive sessions of declines since last Friday. At the time of writing, XAU/USD is trading at $2,648, having hit a high of $2,663.

The market mood remains gloomy, as evidenced by the loss of US stocks. According to various news outlets, developments in the Middle East suggest a likely escalation. This means that bullion prices may continue to rise in the low term.

Israel’s envoy to the UN commented that Iran would suffer the consequences of Tuesday’s missile attack. At the same time, US Deputy Secretary of State Kurt Campbell added that “not only Israel is considering options for responding to Iran’s attack, but also the United States.”

Additionally, private sector employment in the United States (US) rose above estimates in September, according to ADP National Employer Change data. Meanwhile, Richmond Fed President Thomas Barkin said the 50 basis point (bps) rate cut in September confirmed that interest rates were “out of sync.”

Barkin added that some aspects of the economy suggest the disinflation process will continue, but “it’s hard to say the inflation battle has been won yet.”

The unprofitable metal extended gains following the Fed’s decision to lower the federal funds rate at its September meeting. Nevertheless, higher U.S. Treasury yields and a stronger U.S. dollar during the day are negatively impacting the precious metal.

US 10-year Treasury bonds yield 3.783%, five basis points higher. At the same time, the US dollar index (DXY), which tracks the dollar against a basket of six other indices, is gaining 0.39% to 101.60.

A week ago, investors will monitor further employment data in the US. On Friday, Nonfarm Payrolls data is expected to show that the economy added 140,000 jobs to the labor force in September. people, i.e. less than 142 thousand jobs created in August, while the unemployment rate is expected to remain unchanged.

Daily market update: Gold price falls amid war in the Middle East

The national ADP employment change for September was 143,000, compared with an upwardly revised 103,000. in the previous month and exceeding the forecasts of 120 thousand.
The August Job Openings and Employee Turnover Survey (JOLTS) improved, exceeding estimates and easing labor market problems.
Nevertheless, business activity in the manufacturing sector as measured by the ISM Manufacturing PMI for September was steady at 47.2, unchanged from the previous reading, but lower than the estimate of 47.5.
According to the CME FedWatch Tool, market participants put the odds of a 25-basis-point Fed rate cut at 63.8%, while the odds of a larger 50-basis-point rate cut fell to 36.2%.

XAU/USD Technical Analysis: Gold price falls but remains above $2,650

The price of gold is trending upwards even as investors book profits in anticipation of the next phase of the conflict. Momentum remains bullish, as reflected by the Relative Strength Index (RSI), but is breaking out of overbought conditions, triggering a pullback.

If XAU/USD falls below $2,650, it will open the door to testing the September 30 intraday low of $2,624, followed by the September 18 high of $2,600. A violation of the latter will result in a 50-day elementary moving average (SMA) of $2,513.

Moreover, if it breaks the record high of $2,685, it could raise its profits to $2,700.