Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
Gold Prices Eye US PMI, Jobless Claims Data as FOMC Members Go Dark

Gold Prices Eye US PMI, Jobless Claims Data as FOMC Members Go Dark

Thomas Westwater, Analyst

Gold Price Fundamental Forecast: Bearish

  • Gold prices fell last week as Treasury yields rose amid hawkish Fedspeak
  • A FOMC blackout period puts economic data in focus for rate traders
  • US PMIs and weekly jobless claims data on the radar for bullion prices
Gold Forecast
Gold Forecast
Recommended by Thomas Westwater
Get Your Free Gold Forecast
Get My Guide

Gold prices trimmed losses on Friday and brought its weekly performance positive for the week, retracing a portion of its losses from the prior week, although the yellow metal remains on course to record its seventh consecutive monthly loss. The failure to break last month’s 2022 low offers encouragement, although the fundamental outlook remains bearish amid rising rates. Bond traders have good reason to be bearish until a tangible Federal Reserve policy pivot comes into view. Traders may decide to sell into strength next week.

While it is encouraging to see gold holding above its September low as Treasury yields hit new highs, the bond selloff remains a headwind for bullion prices. The policy-sensitive 2-year US yield rose above the 4.6% mark last week as FOMC members sounded off on the need for more rate hikes. Federal Reserve Governor Lisa Cook said that inflation remains unacceptably and stubbornly high. Rate traders are pricing a 100% chance for a 75-basis point rate hike at the November 02 FOMC meeting and a 13% chance for a 100-bps hike, according to Fed funds futures.

Moreover, US economic data suggested that the jobs market remains resilient, a discouraging sign for gold traders. That is because the Fed wants to see some softening in labor numbers, which should help to cool persistently high inflation. US initial jobless claims for the week ending October 15 crossed the wires at 214k, beating the 230K Bloomberg consensus forecast and down from 226k the week prior.

How to Trade Gold
How to Trade Gold
Recommended by Thomas Westwater
How to Trade Gold
Get My Guide

The FOMC blackout period began on Saturday after a week of hawkish Fedspeak. This week’s data includes updated purchasing managers’ indexes from S&P Global and weekly jobless claims data. Analysts expect to see the October manufacturing PMI decrease to 51.0 from 52.0, and the services PMI remain nearly unchanged at 49.4. America’s factory sector has been surprisingly strong amid aggressive rate hikes.

According to the Federal Reserve, factory production utilization hit the highest level since 2000, suggesting healthy demand. That said, the manufacturing PMI looks primed to surprise estimates. That would likely firm up already lofty rate hike bets. Gold is likely to fall under that scenario, although given the recent selloff, a relief rally can’t be ruled out. Selling into gold strength outside of a dovish sentiment shift for rates may be the smart move if that were to occur.

Gold Versus 2-Year Treasury Yield - Daily Chart

Chart, line chart, histogram  Description automatically generated

Chart created with TradingView

The Quiz
Discover what kind of forex trader you are
Start Quiz

--- Written by Thomas Westwater, Analyst


To contact Thomas, use the comments section below or @FxWestwater on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.