Gold Price Retreats; British Pound Drops as US Dollar Rises
Octa | Oct 16, 2023 08:43AM ET
On Friday, the Swiss franc (CHF) was the best-performing currency among the 20 global currencies we track, while the New Zealand dollar (NZD) showed the weakest results. The Thai baht (THB) was the leader among emerging markets, while the Brazilian real (BRL) underperformed.
The gold price surged over 3% on Friday, having the largest daily gain this year as escalating tensions in the Middle East increased the demand for safe-haven assets.
The conflict in the Middle East shows no signs of easing, so investors continue to move out of risky assets. As a result, U.S. equity indices decreased on Friday, while the US Dollar Index (DXY) and gold rose. In addition, the U.S. Consumer Sentiment report figures came out lower than anticipated, further strengthening the bullish trend in XAUUSD.
After reaching a one-month high and touching a critical 1,934 resistance level on Friday, XAU/USD started to decline in Monday's Asian session and continued falling during the early European session. Today, investors will likely continue closely observing the developments in the Middle East. Also, traders await the speech by Patrick Harker, the President of the Philadelphia Federal Reserve (Fed), today at 2:30 p.m. UTC. 'Spot gold is expected to retest resistance of 1,933 USD per ounce, a break above which could open the way towards 1,953,' said Reuters analyst Wang Tao.
h2 GBP/USD Trades Below 1.22000 as Traders Await U.K. Employment and Inflation Data/h2The British pound (GBP) lost 0.26% on Friday as the US dollar rose due to safe-haven flows.
GBP/USD has been declining steadily since July due to narrowing interest rate differences between the U.K. and the U.S. Most recently, the higher-than-expected U.S. inflation figures and concerns stemming from the Israel-Hamas conflict additionally weighed down on GBP. Two events this week will largely determine the Bank of England's (BOE) interest rate decision in November: the Office for National Statistics (OSN) will release the latest Labour Market Overview at 6:00 a.m. on Tuesday and Prices Indices for September on Wednesday. GBP traders should be especially cautious within the next 48 hours.
GBP/USD was rising slightly during the Asian and early European sessions. Two main events for the pair are due on Tuesday and Wednesday. However, the release of the New York Manufacturing Index at 12:30 p.m. UTC today may trigger some volatility. If the figures come out lower than expected, GBP/USD may rise towards 1.22250.
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