Here is the update on XAU/USD news for today, November 16, 2023. Gold prices (XAU/USD) have increased for the second consecutive day, marking positive movement for four out of the last five days. It tested nearly two-week highs, trading in the $1,987-$1,988 range during the first half of the European session.

Recently released macro data from the U.S., including lower-than-expected CPI and PPI figures, reinforced the belief that the Federal Reserve (Fed) has ended its rate hike cycle. Additionally, the market currently anticipates a possible rate cut in the first half of 2024.

This, in turn, has lowered the yield on U.S. government bonds for 10 years to the lowest level in over two months, supporting the appeal of non-yielding assets like gold.

Despite this, hopes for a dovish stance from the U.S. central bank have not significantly helped the U.S. Dollar (USD) recover from the lowest level since September 1 reached on Tuesday.

Mixed signals from high-level negotiations between the U.S. and China provide additional support for gold prices, which are viewed as a safe-haven asset, bolstering the potential for further short-term appreciation.

Investors are now awaiting U.S. housing market data and speeches from Fed officials for new momentum. Nevertheless, XAU/USD is on track to record a weekly gain of nearly 2.5%, reversing two weeks of consecutive declines to its lowest level since October 18 that occurred on Monday.

Daily Market Movers Summary: Gold tests two-week highs as expectations for Fed rate cuts increase.

  1. Gold has recovered more than $50 from its low around $1,932-$1,931 on Monday, driven by speculation that the Federal Reserve has finished raising interest rates.
  2. This week's U.S. CPI report shows consumer inflation slowing, while U.S. unemployment claims indicate weakness in the labor market.
  3. The core CPI remained stable in October, with the smallest annual increase in two years, slowing to 3.2% from 3.7% in September.
  4. The number of new unemployment insurance claims rose to 231,000 for the week ending November 11, up from a revised 218,000.
  5. Falling oil prices could create a disinflationary effect, bringing the Fed closer to its 2% target and allowing for a shift away from a hawkish stance.
  6. Fed officials have acknowledged progress in controlling inflation, reinforcing the idea that the tightening policy campaign is nearing its end.
  7. Traders believe that U.S. interest rates will not rise further, with the first rate cut expected in March 2024.
  8. The yield on 10-year U.S. bonds has fallen to a two-month low, weakening the U.S. Dollar and supporting gold prices.
  9. Biden and Xi have agreed to open military channels, improving relations between the two largest economies in the world.
  10. After the summit, Biden referred to Xi as a "dictator," potentially creating tension.
  11. Traders are looking forward to U.S. housing market data and Chicago Fed President Austan Goolsbee's speech for short-term opportunities this weekend.


Warning!

This analysis on "XAUUSD Today: November 17, 2023 - Gold Rises High, Fed Dovish" is based on fundamental and technical insights from reliable sources and does not constitute financial advice or solicitation. Always remember that this content aims to enrich the reader's information. Conduct independent research before using other forex information as a reference for your trading decisions.

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