Gold rebounds! Powell's speech triggers sell-off, but geopolitical risks become bullish trump card?
2025-09-19 11:41:08
Spot gold rebounded slightly in Asian trading on Friday (September 19), currently trading around $3,654.18 per ounce, up approximately 0.30%, breaking a two-day losing streak. Gold prices briefly reached a record high of $3,707.35 per ounce on Wednesday, but subsequent comments from Powell, optimistic labor market data, and a strong Philadelphia Fed survey boosted sentiment towards the US dollar. Prices of dollar-pegged precious metals remained under pressure, but geopolitical risks continued to support the safe-haven metal.
Precious metals came under pressure as profit-taking followed the release of upbeat labor market data, prompting a surge in buying into the US dollar. The data contrasted with some of the comments made by Federal Reserve Chairman Powell at his press conference. The Philadelphia Fed's manufacturing index for September far exceeded expectations, showing a significant improvement from August's reading.
On September 17th (local time) (September 18th, Beijing time), the Federal Reserve cut interest rates by 25 basis points. However, the decision was not unanimous—Stephen Milan supported a 50 basis point cut, as widely expected by the market. This laid the foundation for continued accommodative policy at the final two meetings of the year. Although Powell stated that each meeting would be "real-time" and data-driven, concerns about a deteriorating labor market temporarily overshadowed the central bank's mandate for price stability.
Looking ahead, the outlook for gold prices remains positive as gold, with its interest-free nature, tends to perform strongly during the Federal Reserve's easing cycle. Furthermore, data shows that Switzerland's gold exports to China surged 254%.
On the other hand, rising geopolitical tensions in the Middle East could boost the price of gold, a traditional safe-haven asset. Israeli media reports indicate that the military is preparing to launch a large-scale ground offensive against Gaza City. Israel has been preparing for such an operation for weeks, urging civilians to evacuate to designated humanitarian areas such as Mahwahi.
Initial jobless claims in the United States came in at 231,000 for the week ended September 13, below expectations for 240,000 and the previously revised upward 264,000. Continuing claims fell to 1.92 million from 1.939 million.
The Philadelphia Fed's manufacturing index jumped to 23.2 in September from a contraction of -0.3 in August, far exceeding expectations for a 2.3-point increase. The survey showed: "Nearly 40% of businesses reported an increase in overall activity for the month, while 17% reported a decrease and 43% reported no change. The new orders index rose 14 points to 12.4, while the shipping index jumped 22 points to 26.1."
Regarding inflation, the Fed noted that it "has rebounded and remained high", while also emphasizing that economic growth had slowed in the first half of 2025.
The Summary of Economic Projections (SEP) shows that the median forecast for the federal funds rate is 3.60%, indicating that there will be another 50 basis points of interest rate cut this year.
Federal Reserve Chairman Powell stated that labor demand has softened and inflation remains stubbornly high. He added that the balance of risks has shifted, that current policy can respond to these changes, and that the labor market is not firmly entrenched. When asked about the discussion of a 50 basis point rate cut, he explicitly stated that there was "no broad support" and emphasized that there was no rush to implement easing policy.
U.S. Treasury yields rose steadily, with the 10-year Treasury yield rising 1.5 basis points to 4.102%. As of early Asian trading, U.S. real yields surged nearly 2 basis points to 1.722%. The U.S. dollar index was at 97.30.
Gold prices have rebounded above $3,650, maintaining their overall upward trend. In the medium term, if gold can hold above $3,600, the precious metal remains bullish. Although the Relative Strength Index (RSI) dipped below 70, triggering a sell-off on Wednesday, price action remains constructive.
The September 9 high of $3,674 constitutes initial short-term resistance, with the next resistance level pointing to the all-time high of $3,707. A successful breakout would open the door to $3,750 and $3,800. Conversely, if gold falls below the September 11 low of $3,613, it could plummet to $3,600.
(Spot gold daily chart, source: Yihuitong)
At 11:40 Beijing time, spot gold was trading at $3,654.83 per ounce.
Gold prices fall in the short term, but are bullish in the long term
Precious metals came under pressure as profit-taking followed the release of upbeat labor market data, prompting a surge in buying into the US dollar. The data contrasted with some of the comments made by Federal Reserve Chairman Powell at his press conference. The Philadelphia Fed's manufacturing index for September far exceeded expectations, showing a significant improvement from August's reading.
On September 17th (local time) (September 18th, Beijing time), the Federal Reserve cut interest rates by 25 basis points. However, the decision was not unanimous—Stephen Milan supported a 50 basis point cut, as widely expected by the market. This laid the foundation for continued accommodative policy at the final two meetings of the year. Although Powell stated that each meeting would be "real-time" and data-driven, concerns about a deteriorating labor market temporarily overshadowed the central bank's mandate for price stability.
Looking ahead, the outlook for gold prices remains positive as gold, with its interest-free nature, tends to perform strongly during the Federal Reserve's easing cycle. Furthermore, data shows that Switzerland's gold exports to China surged 254%.
On the other hand, rising geopolitical tensions in the Middle East could boost the price of gold, a traditional safe-haven asset. Israeli media reports indicate that the military is preparing to launch a large-scale ground offensive against Gaza City. Israel has been preparing for such an operation for weeks, urging civilians to evacuate to designated humanitarian areas such as Mahwahi.
A stronger dollar continues to weigh on gold prices
Initial jobless claims in the United States came in at 231,000 for the week ended September 13, below expectations for 240,000 and the previously revised upward 264,000. Continuing claims fell to 1.92 million from 1.939 million.
The Philadelphia Fed's manufacturing index jumped to 23.2 in September from a contraction of -0.3 in August, far exceeding expectations for a 2.3-point increase. The survey showed: "Nearly 40% of businesses reported an increase in overall activity for the month, while 17% reported a decrease and 43% reported no change. The new orders index rose 14 points to 12.4, while the shipping index jumped 22 points to 26.1."
Regarding inflation, the Fed noted that it "has rebounded and remained high", while also emphasizing that economic growth had slowed in the first half of 2025.
The Summary of Economic Projections (SEP) shows that the median forecast for the federal funds rate is 3.60%, indicating that there will be another 50 basis points of interest rate cut this year.
Federal Reserve Chairman Powell stated that labor demand has softened and inflation remains stubbornly high. He added that the balance of risks has shifted, that current policy can respond to these changes, and that the labor market is not firmly entrenched. When asked about the discussion of a 50 basis point rate cut, he explicitly stated that there was "no broad support" and emphasized that there was no rush to implement easing policy.
U.S. Treasury yields rose steadily, with the 10-year Treasury yield rising 1.5 basis points to 4.102%. As of early Asian trading, U.S. real yields surged nearly 2 basis points to 1.722%. The U.S. dollar index was at 97.30.
Gold price rebounds above $3,650, bullish trend continues
Gold prices have rebounded above $3,650, maintaining their overall upward trend. In the medium term, if gold can hold above $3,600, the precious metal remains bullish. Although the Relative Strength Index (RSI) dipped below 70, triggering a sell-off on Wednesday, price action remains constructive.
The September 9 high of $3,674 constitutes initial short-term resistance, with the next resistance level pointing to the all-time high of $3,707. A successful breakout would open the door to $3,750 and $3,800. Conversely, if gold falls below the September 11 low of $3,613, it could plummet to $3,600.
(Spot gold daily chart, source: Yihuitong)
At 11:40 Beijing time, spot gold was trading at $3,654.83 per ounce.
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