This is an update on XAUUSD for today, October 17, 2023. Gold prices (XAU/USD) struggled to maintain gains seen at the end of the previous day from the $1,908 level and faced downward pressure during Tuesday’s Asian session. This marks a two-day decline for the precious metal, influenced by positive risk sentiment, which tends to reduce the appeal of traditional safe-haven assets.
 
Additionally, the rise in U.S. Treasury yields, driven by expectations of further tightening by the Federal Reserve (Fed), has pressured non-yielding gold prices.
 
However, it is important to note that tensions between Israel and Hamas could still support gold prices. This, along with expectations that the Fed will keep rates unchanged for the second consecutive time in November, could provide support to XAU/USD.
 
On the other hand, the Fed's dovish stance keeps the U.S. Dollar (USD) under pressure, which might help limit losses in commodities priced in USD. Traders might also exercise caution ahead of Fed Chair Jerome Powell's speech on Thursday.
 
Powell's comments will be closely monitored for clues on future interest rate policies, which will play a key role in determining gold's next direction.
 
However, the recent failure to approach the technically significant 200-day Simple Moving Average (SMA) suggests caution is needed before taking positions for a continued price recovery from the $1,810 level, the lowest in several months on October 6.
 
Market Summary: Gold prices remain under pressure for the second consecutive day.
 
  • The conflict between Israel and Hamas may continue to drive safe-haven flows.
  • Israel Defense Forces plan to enter the Gaza Strip to confront Hamas militants.
  • Israel has urged Palestinians to evacuate to the southern part of Gaza City ahead of an anticipated large-scale ground offensive.
  • The U.S. military has dispatched a second carrier strike group to the Eastern Mediterranean to counter Iranian influence and its allies in the conflict.
  • Iran has warned that a ground invasion of long-besieged Gaza will trigger a response.
  • Iran's Foreign Minister, Hossein Amir-Abdollahian, indicated possible preemptive action in the coming hours.
  • Patrick Harker, President of the Federal Reserve Philadelphia, supports keeping interest rates stable if data remains consistent.
  • Despite recent U.S. consumer inflation figures, Federal Reserve interest rates might still rise by year-end.
  • The prospect of further Fed tightening supports higher U.S. bond yields and impacts the U.S. Dollar's movements.
  • Traders will monitor U.S. Retail Sales data, but Fed Chair Jerome Powell's Thursday speech will remain the main focus.
  • U.S. Retail Sales in September are expected to grow around 0.3%, while sales excluding autos are forecast to increase by about 0.2% for the same month.
Disclaimer!

This is the explanation about "XAUUSD Today: October 17, 2023 - Weak Safe-Haven Demand, Gold Prices Plunge." This analysis is based on fundamental and technical perspectives from reliable sources, and it does not serve as advice or a recommendation. Always remember that this content is intended to enrich the reader's knowledge. Always conduct your own research on other forex information to use as a reference for your trading.

Get the latest News and Articles from GIC Indonesia, which you can check daily on Google News to stay updated on forex and crypto developments. Also, trade on GICTrade using an ECN account to enjoy trading with low spreads starting from zero!