Gold Performance 21st October: gold rises, jobless claims up next

Gold closed near $4,142 an ounce on Wednesday 21 October, up about $16, or 0.4%, on the day. The gold price today ended a three-day losing run as the 10-year US Treasury yield eased for a second session and oil prices cooled, trimming the cost of holding a metal that pays no interest.

Where the move happened

Gold drifted lower after Tuesday's close and touched its low of the day near $4,109 early in Asian trade. It spent the rest of the Asian session between about $4,115 and $4,125, little changed overall.

London did most of the work. Buyers lifted the price about $16 during European hours, and it briefly reached $4,141 before New York opened.

New York added another $13 or so, though not in a straight line. In the middle of the afternoon gold dropped about $20 in less than an hour, the sharpest swing of the day. It won all of that back and closed at its high.

Why did gold rise on Wednesday?

Yields slipped. The 10-year US Treasury yield fell for a second straight session, which lowers the opportunity cost of holding gold, and spot gold was up 0.3% near $4,138 in the early afternoon in New York, Reuters reported, rebounding from its lowest level since 15 October. FXStreet had the yield near 5.11% in the afternoon, so it is still above 5%.

Oil cooled. Crude prices eased after the US authorized the unloading of cargo from some blocked vessels, FXStreet reported. USAGOLD's Wednesday morning report had Brent crude above $110 a barrel. Expensive oil has fed inflation worries and bets on another Fed hike, and it kept gold falling for three sessions, as Tuesday's edition showed.

The Fed still caps the upside. Nearly all economists in a Reuters poll expect the Federal Reserve to hold rates at its 27 to 28 October meeting and raise them in December, and CME FedWatch put the chance of a December hike at 88%. Giovanni Staunovo of UBS said he sees buying interest below $4,100 but limited upside while the Middle East conflict stays a theme. Conflicting reports about a possible US-Iran deal kept that theme alive on Wednesday, RTTNews said. Our explainer covers why higher rates weigh on gold.

Our number: 18 closes inside a $90 band

On our price data, Wednesday was gold's 18th straight weekday close between $4,100 and $4,200, a run that began on 28 September. The highest and lowest of those closes are only about $90 apart, roughly 2%.

That calm sits a long way under the peak. Gold is still down about 0.6% since Friday's close and about 24% below its record of $5,426, set on 29 January. The gold price history page has the full run.

Up next: what to watch tomorrow

• Thu 22 Oct: US weekly jobless claims from the Department of Labor, at 8:30 am New York time. The consensus on Investing.com is about 200,000.
• Thu 22 Oct: the Conference Board's Leading Economic Index for September, at 10 am New York time.
• Thu 22 Oct: no Fed speakers. Officials are in their quiet period before the 27 to 28 October decision, so oil and US-Iran headlines are likely to set the tone.