What could be affecting the gold price
Since the US Department of Labor Statistics somewhat conflicted jobs data on November 4th, gold has increased significantly. The that the US economy added 261,000 jobs in September was overshadowed by the fact that it was the minor, most little jobs printed in recent memory as the unemployment rate increased to 3.7%. As a result, the Fed’s terminal rate was revised downward, and the FOMC’s final rate-setting meeting of the year was given a smaller estimate.
As a result, markets reduced their USD positioning in anticipation of slower Fed rises due to the higher unemployment rate, which caused the US currency to decline. This is a sign that rate hikes are having an impact on the financial markets. The weaker USD makes gold more appealing to international investors, which may cause gold prices to increase.
But more recently, the unexpectedly lower US CPI reading on Thursday sparked widespread confidence that the rate of inflation is declining and that rate rises may not last as long as expected. Jerome Powell has not yet commented on the recent market optimism. Still, other Fed officials have emphasized that more robust evidence is required before the Fed can consider diverging from its present course. The dollar selloff accelerated as US Treasury prices increased and rates fell.
Because the non-interest-bearing yellow metal is sometimes viewed as a less appealing option when rates are increasing, US Treasury yields frequently move in the opposite direction to gold prices. The correlation coefficient indicator, which demonstrates that the two assets are still negatively associated, reveals this dynamic, which has been pretty intense recently.