The precious metal attracted aggressive demand that pushed the prices towards the $2,134 zone earlier in the day
Stocks in the US surged and Treasury yields fell on Friday even as Fed’s Powell pushed back against the market’s expectations for interest rate cuts ahead. The central bank governor said it is premature to conclude with confidence that monetary policy is sufficiently restrictive. Still, investors interpreted his remarks a signal that the regulator is at least done with hikes. As such, the S&P 500 added nearly 0.6% to see a closing high for 2023. The tech-heavy Nasdaq advanced 0.55% and the Dow Jones gained 0.82%, bringing its 2023 gain to 9.4%.
Asian equities were mixed on Monday amid persistent worries about an economic slowdown in China after a series of dismal economic data from the country over the past week. As such, the Shanghai Composite index gave up nearly 0.3% and Hong Kong’s Hang Seng fell more than 1% even as Evergrande’s Hong Kong Shares rallied over 10% after a court adjourned a liquidation petition against the firm to end-January. Elsewhere, Japan’s Nikkei 225 sank 0.73%, Australia’s S&P/ASX 200 added 0.73% and South Korea’s Kospi rose 0.4%.
Meanwhile, the US dollar surged on Monday amid mixed risk sentiment across the financial markets. Ahead of the weekend, the USD index managed to hold above the 103.00 figure that continues to act as the nearest significant support at this stage. The greenback is oscillating around the 103.30 zone after the latest comments from Powell. In the near-term, the outlook for the dollar looks neutral while in the longer-term, the US currency could be hurt by rising rate-cut expectations.
Elsewhere, gold prices surged to fresh record highs above the $2,100 handle. The precious metal attracted aggressive demand that pushed the prices towards the $2,134 zone earlier on Monday. The bullion has retreated below $2,100 since then, trading unchanged for the day ahead of the opening bell in Europe. The XAUUSD pair could see fresh gains in the near term as dollar demand remains subdued amid less hawkish signals from the Fed and lower Treasury yields. On the downside, the immediate support now arrives in the $2,070 area, followed by the $2,050 region.