Gold also fell on Friday as investors took profits after the record rally earlier this week. Despite the decline, ongoing geopolitical tensions in the Middle East – particularly hostilities in Lebanon – provided underlying support, saving the metal from further losses. US Secretary of State Antony Blinken emphasized the urgency of reaching a diplomatic solution in the region, helping keep gold prices steady.
Looking ahead, traders are focused on upcoming US inflation and economic data releases, seeking more insight into the stability of the economy and possible shifts in monetary policy.
In bond markets, 10-year Treasury yields held steady Friday after a week in which they exceeded a three-month high of 4.25%. Yields on 2-year US government bonds were also little changed at 4.064%, reflecting a cautious attitude from investors.
Federal Reserve policymakers have taken a measured tone this week, with the Cleveland Fed’s Beth Hammack suggesting caution is needed in the ongoing battle against inflation.
While there is a 97% probability of a 25 basis point rate cut in November, according to the CME FedWatch Tool, policymakers have indicated that future cuts will be slower. This cautious approach to interest rates has affected demand for precious metals, as changes in interest rates typically impact non-yielding assets such as silver and gold.