Gold moves below 1,850 on market caution, Fed Powell speech eye
Gold continues its downward trend that started on September 25th, as it trades at a lower level of around 1,840 per troy ounce during Monday's Asian session. The release of China's Manufacturing PMI data over the weekend indicated some improvement, but it did not offer any assistance to the XAU/USD price.
The likelihood of a partial government shutdown in the United States on October 1, which poses a risk to the economy, is increasing. Additionally, there are ongoing concerns about a real estate crisis in China. These factors contribute to the rise in demand for the safe-haven precious metal.
The diverging paths of the two chambers of Congress have raised the possibility that federal agencies will run out of funds by Sunday. The Democratic-led US Senate has taken steps to pass a bipartisan stopgap funding bill that would extend federal spending until November 17. However, it may not be approved before the weekend deadline. On the other hand, some conservative House Republicans are advocating for significant spending cuts and have stated that they will not support the Senate's bill or any temporary legislation that would provide more time for Congress to act. House Republicans have already rejected the spending levels set for fiscal year 2024 in a previous agreement between Speaker Kevin McCarthy and President Joe Biden in May 2023.
The positive impact on precious metal prices is somewhat tempered by growing expectations that the Federal Reserve (Fed) will maintain its hawkish stance and continue tightening its monetary policy. In fact, the US central bank issued a warning last week indicating that inflation, which remains stubbornly high, is likely to persist.
The likelihood of a partial government shutdown in the United States on October 1, which poses a risk to the economy, is increasing. Additionally, there are ongoing concerns about a real estate crisis in China. These factors contribute to the rise in demand for the safe-haven precious metal.
The diverging paths of the two chambers of Congress have raised the possibility that federal agencies will run out of funds by Sunday. The Democratic-led US Senate has taken steps to pass a bipartisan stopgap funding bill that would extend federal spending until November 17. However, it may not be approved before the weekend deadline. On the other hand, some conservative House Republicans are advocating for significant spending cuts and have stated that they will not support the Senate's bill or any temporary legislation that would provide more time for Congress to act. House Republicans have already rejected the spending levels set for fiscal year 2024 in a previous agreement between Speaker Kevin McCarthy and President Joe Biden in May 2023.
The positive impact on precious metal prices is somewhat tempered by growing expectations that the Federal Reserve (Fed) will maintain its hawkish stance and continue tightening its monetary policy. In fact, the US central bank issued a warning last week indicating that inflation, which remains stubbornly high, is likely to persist.
