Ella 
Gold prices continued their upward move and gained some positive traction during Friday’s Asian session, building on the previous day’s rebound from the $1,914-$1,913 area, or one-week low. Gold is currently trading around $1,925, up just over 0.20% on the day, and appears to have ended a three-day losing streak.
Meanwhile, gold’s intraday rally lacked any clear fundamental catalyst and could soon fade as the Federal Reserve prepares to raise interest rates until inflation returns to its 2% target. In fact, the Fed has warned that still-firm U.S. inflation is likely to attract at least one 25-basis-point rate hike before the end of the year.
Additionally, the so-called “dot plot” showed policymakers see the benchmark rate at 5.1% in 2024, suggesting only two rate cuts will be needed next year, compared with four previously expected. Separately, the U.S. Labor Department reported on Thursday that the number of Americans filing new claims for unemployment benefits fell to an eight-month low last week, indicating continued tightness in the labor market.
That would allow the Fed to keep interest rates higher for longer and lead to a prolonged sell-off in U.S. fixed-income markets, pushing the rate-sensitive two-year Treasury yield to its highest level since July 2006. Additionally, benchmark 10-year Treasury yields rose to a 16-year peak, continuing to support the U.S. dollar and dampening any meaningful appreciation moves in non-yielding gold prices.
Therefore, it would be prudent to wait for strong follow-through buying before establishing new bullish bets on Gold/USD. Market participants now look forward to the release of the latest Purchasing Managers Index (PMI) to get a sense of the health of the global economy. This in turn affects broader market risk sentiment, driving demand for traditional safe-haven assets and gold prices.
