Gold may decline as Friday's US bonds relief rally likely to be tested
gold closed with a weekly gain of 0.10% at $1,925 and was up 0.31% on Friday.
The week ending September 22 was marked with crucial monetary policy decisions of three key central banks — Federal Reserve, Bank of England and Bank of Japan.
The US Federal Reserve, in a widely expected move, skipped a rate hike at its FOMC monetary policy meeting concluded on September 20. However, the Federal Reserve's stance was hawkish as the Central Bank increased the projected rate for 2024 to 5.10% from 4.60%, which implies a rate cut of 50 bps as against the previous estimate of a 100 bps rate cut.
The Federal Reserve raised the growth forecast for 2023 to 2.10% from the previous projection of 2%. The bank sees a lower unemployment rate, too.
In his press conference, Federal Reserve Chair Powell said that the economy has strong momentum, though high energy prices if sustained, can affect inflation. The US Federal Reserve hinted that the bank is more likely than not to hike the benchmark rate once more.
Hawkish Federal Reserve sent the US ten-year yields soaring as the ten-year US yields took out the strong resistance at 4.35% to touch 4.50%.
UK's inflation data trailed the forecast, which prompted the Bank of England to unexpectedly skip a rate hike as the bank shifted its focus from its inflation fight to the risks to the UK economy.
Bank of Japan kept its key rate and YCC policy unchanged, thus belying the hopes of any changes.
The Japanese Yen continues to be under pressure.
Friday was the day of global manufacturing, services, and composite PMIs. S&P Global US composite PMI data (September Preliminary) at 50.10 trailed the forecast as services PMI data at 50.20 was short of expectations of 50.70.
