Gold trading reminder: A number of Federal Reserve officials made hawkish speeches, and gold prices fell to a new low in nearly two weeks

On Tuesday (November 7), the dollar rose, world stocks regained lost ground, Wall Street surged, and investors assessed the Federal Reserve's comments that the U.S. economy was too strong and may need to raise interest rates again to curb inflation. The safe-haven rally sparked by tensions in the Middle East faded, and risk appetite before Powell's speech drove gold prices to a new low of $1,956.57 an ounce in nearly two weeks.

(Spot gold trend chart)

Spot gold closed at $196.07 an ounce on Tuesday, down 0.45%.

COMEX December gold futures closed down $15.10 an ounce, or 0.76%, at $1973.50 an ounce.

COMEX 12-month silver closed down 2.78% at $22.589 an ounce, falling to $23 an ounce.

[Market News Analysis]

Gold and silver prices have fallen in the past few weeks as the political premiums they accumulated following the Israeli-Palestinian conflict at the beginning of last month began to fall back.

Another factor contributing to the weakness in precious metals prices is reduced demand for safe-haven positions. Recently, the bull market in US stocks has continued, and the US stocks have continued to rise. The S & P 500 Index and the Nasdaq Composite are on track for their longest consecutive gains in nearly two years. As a result, the fear of missing out on opportunities has prompted traders to turn their attention to equities rather than non-income assets.

Despite recent market developments, there are still reasons to be optimistic about precious metals. That said, one catalyst that could put upward pressure on their prices is a pullback in interest rates. Last month, the yield on the 10-year U.S. Treasury note broke through 5.0%, but has since pulled back sharply, falling below 4.6% today. If this correction accelerates in the short term, then the backdrop for gold and silver will become more constructive.

Meanwhile, the dollar tried to regain ground after the market raised expectations of a rate cut next year. Gold showed weakness and came under pressure as the dollar strengthened.

Gold remains under pressure due to rising Treasury yields and mixed signals from Federal Reserve officials.

In a speech to the Ohio Bankers Union on Tuesday, Bowman, a Fed governor, said she saw recent GDP data as evidence that the economy not only "remains strong" but may have picked up speed, requiring the Fed to raise policy rates.

"I still expect we will need to raise the federal funds rate further," Mr. Bauman said.

The US economy grew at an annualised rate of 4.9 per cent in the third quarter, a "blowout" that "needs to be watched closely as we consider future policy", Federal Reserve governor Paul Waller said on Tuesday.

Optimism on Wall Street created headwinds for safe-haven assets. Fed officials, led by Lisa Cook, the Fed governor, continued to use the news line, saying on Monday that current interest rate policy was restrictive enough to achieve price stability.

Federal Reserve Chairperson Jerome Powell will speak on Wednesday and Thursday, and the focus will be on whether he maintains the more dovish tone he adopted after last week's Fed policy meeting.

"If Powell speaks out against easing financial conditions later this week and sounds more hawkish... I think the dollar can rebound," said CBA's Kong.

[Tuesday focuses on financial data and events (Beijing time) ]

① 15:00 Germany October CPI monthly rate final value

② 15:45 France's September trade balance

③ 17:30 Bank of England Governor Bailey delivers a speech

④ 18:00 Monthly retail sales in the Eurozone in September

⑤ 22:15 Federal Reserve Chairperson Powell addressed the event

④ 23:00 US wholesale sales monthly rate in September

The next day at 02:40, Federal Reserve Williams delivered a speech