Gold prices surged above $4,100 as a broad equity market sell-off, led by a 5.9% drop in the NASDAQ 100, drove investors toward safe-haven assets amid fading Fed rate hike bets.
The NASDAQ 100 plummeted nearly 5.9% in a bloodbath on Thursday as risk appetite soured following the Democratic landslide victory in the US midterm elections, with investors rotating from tech stocks to defensive ones. A decline of this magnitude in one session typically marks severe selling pressure that can extend over the following days.
The index tumbled nearly 5.9% as investors rotated out of tech stocks into defensive ones after the Democratic landslide in the US midterm elections soured risk appetite.
Traders now see a 66% chance of a December Fed hike, down from 82%, and the 10-year yield fell six basis points to 4.829%, which could offer some support to growth stocks.
The S&P 500 tumbled 3.8% in the aftermath of the Democratic landslide victory in the US midterm elections, part of a broad risk-off session alongside the NASDAQ 100's 5.9% plunge. A drop of this size points to strong selling pressure across US equities.
The S&P 500 tumbled 3.8% on Thursday in the aftermath of the Democratic landslide victory in the US midterm elections.
Traders trimmed December Fed hike bets to 66% from 82% and the 10-year yield fell six basis points to 4.829%, which could ease pressure on equities.
The Dow Jones tumbled 2.9% on Thursday in the aftermath of the Democratic midterm landslide, falling less than the S&P 500's 3.8% and the NASDAQ 100's 5.9%, consistent with rotation into defensive components. Still, a near-3% single-day decline reflects broad equity selling.
The Dow Jones tumbled 2.9% on Thursday, faring better than the S&P 500 (-3.8%) and NASDAQ 100 (-5.9%) as investors rotated toward defensive stocks.
Risk appetite soured in the aftermath of the Democratic landslide victory in the US midterm elections.
Gold climbs about 1% above $4,100 after bouncing off daily lows of $4,057, driven by risk-off rotation as the NASDAQ 100 plunges 5.9% and by fading December Fed hike bets, down to 66% from 82%. Falling US 10-year yields at 4.829% (down six basis points) also support the yield-less metal. Friday's NFP report is the key risk that could reverse the move.
Investors are rotating out of crashing tech stocks into defensive assets, and traders have trimmed bets on a December Fed rate hike to 66% from 82%, both of which support gold above $4,100.
A strong October Nonfarm Payrolls report on Friday (expected at 65K, up from 29K) or hawkish Fed rhetoric could revive hike bets; technically, a drop below $4,100 would open the way to $4,000 and the November 4 low of $3,919.
US Treasury yields are falling amid lower inflation expectations as oil prices retreat from pre-election highs; the 10-year note yields 4.829%, down six basis points. Traders also trimmed December Fed hike odds to 66% from 82%, consistent with lower yields. For a yield symbol, Bullish means the yield rises, so this move is Bearish.
Yields fell amid lower inflation expectations as oil prices retreat from pre-election highs, and traders cut the odds of a December Fed rate hike to 66% from 82%.
Solid US jobs data, including Jobless Claims at 189K below forecasts, could strengthen hawkish expectations ahead of Friday's Nonfarm Payrolls report.
Gold prices climbed 1% to reclaim the $4,100 level as investors rotated into defensive assets following a 5.9% crash in the NASDAQ 100. The market sell-off, triggered by the Democratic landslide in US midterm elections, was compounded by a decline in December Fed rate hike expectations to 66%.
Gold is benefiting from a defensive rotation out of crashing tech stocks and a decline in December Fed rate hike expectations, which fell from 82% to 66%.
The upcoming October Nonfarm Payrolls report is the key risk; a strong jobs print could revive hawkish Fed expectations and pressure gold prices back toward $4,000.