Gold Fails at $4,200 for 15th Session as Dollar Slides After Warsh

Gold came within one dollar of 4,200 dollars an ounce this week and closed below that level for a 15th session in a row. The ceiling held even as the dollar fell to its lowest since October 1.

Fed Chair Kevin Warsh spoke in Bangkok during Asian hours. He said the Federal Reserve would deliver price stability, and he gave no fresh guidance on the next rate move. He also said the Fed would no longer routinely preview its rate moves, Action Forex reported.

The dollar slides after Warsh offers no guidance

FXStreet had the Dollar Index falling toward 101.80 after the remarks. Investing.com said the dollar snapped a four week winning streak. MUFG said the lack of fresh guidance reinforced market pricing for a low chance of an October rate hike, and FXStreet said investors trimmed their bets on an October hike despite hot inflation data this week.

A market table published on Saturday, October 17 put gold at 4,186.70 dollars, up 0.40 percent, and the Dollar Index at 101.78, down 0.22 percent. The euro traded at 1.1244 dollars in the same table.

Spot gold had recovered about 1.1 percent on October 15 and 16 to roughly 4,149 to 4,181 dollars an ounce, after the dollar slipped and the benchmark 10 year Treasury yield fell to a multi week low, Particle News reported. Provisional World Gold Council data show central banks bought about 63 tonnes of gold in September.

Hot data keeps the other side of the trade alive

The data still ran hot. US import prices rose 1.1 percent in September and industrial production rose 0.7 percent, investingLive reported. Both figures were above the forecasts on our calendar, 0.9 percent and 0.4 percent.

On Thursday the dollar fell with yields. On Friday US yields edged up after the week's bond rally, Investing.com said, and the dollar fell anyway. After the close, the same source said US yields fell over the week as worries over AI debt drove traders into safe haven bonds.

Oil stayed high through the week. FXStreet had US crude holding its weekly gains near 96 dollars in European trading, and ING said Brent traded comfortably above 100 dollars a barrel.

Why it matters

Gold near 4,200 dollars with a weaker dollar should be an easy trade. It is not, because hot inflation keeps a rate hike on the table, and a hike would lift yields and the dollar. That tension is why the 4,200 dollar ceiling has held for 15 sessions.

What happens next

Traders will watch the next US inflation prints and any Fed speaker who breaks the new no preview habit. A sustained close above 4,210 dollars would be needed to confirm stronger momentum, analysts cited by Particle News said.