HSBC-Precious Metals Daily Gold fell on profit-taking；rally intact but expect volatility-20251017

Market focus, emerging trends

Gold prices were volatile in Asian and London trading. Bullion was initially supported by USD volatility and a decline in yields. US yields continued their recent move lower with the 10-year dipping below 4.00%. In the absence of fresh hard economic data,the market has tended to rely on Fed rhetoric and changes in risk appetite. This supported gold temporarily, but profit-taking after the previous day’s rally was evident. Evidence of some softening in underlying tightness in silver triggered selling.To a more limited degree, this was also the case with platinum and palladium.

The more decisive moves came in US trading. Gold was volatile, making periodic stabs to the upside before profit-taking, triggered by some conciliatory tariff comments made by President Trump who said his proposed 100% tariffs on China imports were “not sustainable.” While not a dramatic comment, it was sufficient to weigh on gold. A higher USD and firmer yields may have provided the rationale for profit-taking to begin in greater earnest. Periodic fresh buying pressed gold higher but only temporarily and profit taking accelerated on suggestions that tariff tensions are easing. This was augmented by a positively viewed meeting between Presidents Trump and Zelensky as well as President Putin saying he would meet Trump soon in Budapest (Reuters). Dovish comments from the Fed’s Alberto Musalem may have helped staunch declines. Much heavier declines came in silver and the PGMs as signs of reduced tightness brought waves of long liquidation and speculative selling.