The decline in XAU/USD has been attributed to the breaking of the gold rally and breaching of significant support levels, which can be linked to the hawkish language used by central banks and an improved risk sentiment, both of which have negatively affected gold prices. The question remains as to how much further XAU/USD may decrease. Despite Fed Chair Jerome Powell’s hawkish stance in his testimony before the Senate Banking Committee, Wall Street seems to have taken it in stride this time, with the S&P 500 and Nasdaq ending their three-day losing streak. However, attention should be given to the Conference Board Leading Economic Index, which has seen its 14th straight month of decline, indicating tighter policies working through economic conditions and keeping rate expectations anchored for an impending end to the Fed’s hiking cycle.
Megacap tech performed well while value sectors were on the backfoot overnight due to upcoming economic challenges presented by data. Flash Purchasing Managers’ Index (PMI) figures will also be watched for any signs of a soft landing. Treasury yields moved higher overnight, leading to a firmer US dollar but weighing on gold prices, which have hit a new three-month low. Asian stocks are set for a mixed open with Hong Kong markets back online today and Mainland