Gold prices (XAU/USD) fell 2% after hitting a record high of $4,379 on Friday (October 17th), falling below $4,250, triggered by comments by US President Donald Trump that triple-digit tariffs against China were unsustainable. At the time of writing, gold bullion prices were hovering around $4,230-$4,240.
Gold bullion prices fell below $4,250 as risk appetite returned and US Treasury yields rose.
The greenback began to recover, a drag on gold prices. However, the biggest move was seen in US Treasury yields, with the 10-year US Treasury yield rising nearly three basis points. US President Donald Trump commented that the threat of higher tariffs against China was unjustified and would likely escalate tensions between the two countries.
Trump added that he hoped to meet with Chinese President Xi Jinping in South Korea in a few weeks. These comments further strengthened risk appetite and pushed precious metal prices down.
Federal Reserve (Fed) officials have delivered statements that defied expectations. Alberto Musalem, Governor of the St. Louis Fed, supported a rate cut at its October meeting but remained fully committed to achieving its 2% inflation target. Earlier, Fed Governor Christopher Waller concurred with Musalem, while Neel Kashkari, Governor of the Minneapolis Fed, said that the economy is not slowing as severely as we had anticipated.
Next week will be a nearly empty US economic data window, but the release of the Consumer Price Index (CPI) figures on Friday at 8:30 a.m. ET is highly anticipated by market participants. (alg)
Source: FXstreet
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