Daily Digest Market Movers: Gold price struggles due to market optimism, Trump trades
- Non-yielding Gold faced downward pressure as US Treasury yields surged to their highest levels since July on Wednesday. The 2-year and 10-year US Treasury bond yields rose to 4.31% and 4.47%, respectively.
- Gold price may receive support as Republican Donald Trump could lead to higher inflation, given his pledge to significantly raise trade tariffs. This may prompt investors to seek safe-haven assets as a hedge against long-term inflation risks.
- Trump’s economic policy includes imposing tariffs, increasing the fiscal deficit, and reducing taxes. These proposals conflict with the Federal Reserve’s efforts to control inflation, likely prompting the US central bank to take a more gradual approach to easing monetary policy.
- The decline in the safe-haven XAU/USD seems relatively unaffected by concerns over Iran's plans for a retaliatory strike against Israel’s attack on its territory on October 26.
- On Tuesday, the US ISM Services Purchasing Managers Index increased to 56.0 in October, up from 54.9 in September, exceeding the forecast of 53.8. In contrast, the S&P Global Services PMI registered at 55.0 in October, slightly below the prior reading and the expected 55.3.
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