Gold also saw a decline on Friday as investors took profits following its record-setting rally earlier in the week. Despite the pullback, ongoing geopolitical tensions in the Middle East—specifically, hostilities in Lebanon—provided underlying support, keeping the metal from further losses. U.S. Secretary of State Antony Blinken emphasized the urgency of reaching a diplomatic solution in the region, which kept gold prices buoyant.
Looking forward, traders are focused on upcoming U.S. inflation and economic data releases, seeking further insight into the economy’s stability and potential shifts in monetary policy.
In bond markets, the 10-year Treasury yield held steady on Friday, following a week where it breached a three-month high at 4.25%. The U.S. 2-year Treasury yield also remained little changed at 4.064%, reflecting a cautious stance by investors.
Federal Reserve policymakers have struck a measured tone this week, with Cleveland Fed’s Beth Hammack suggesting that caution is warranted 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 a slower pace in future cuts. This cautious approach on rates has influenced demand for precious metals, as changes in interest rates typically impact non-yielding assets like silver and gold.