On Wednesday, gold prices fell below the $2,400 mark, erasing earlier gains by the late North American session. The XAU/USD was trading at $2,385, marking a 0.06% decline despite heightened geopolitical tensions in the Middle East and expectations for a more accommodative monetary policy from the Federal Reserve.
Tensions in the region remain high as Israel anticipates potential retaliation from Hamas following the assassination of its leader, Ismail Haniyeh. US intelligence suggests that any response may be delayed until late Thursday or Friday. In response to these tensions, Egypt has instructed its airlines to avoid Iranian airspace for a three-hour period on Thursday.
Despite these geopolitical concerns, gold’s losses were moderated by market sentiment. However, rising US Treasury bond yields and a strengthening US Dollar contributed to the metal’s decline.
The US 10-year Treasury note saw a rise of seven basis points, yielding 3.968%, while the US Dollar Index (DXY), which measures the greenback against six major currencies, increased by 0.27% to 103.20.
With a sparse economic calendar in the US, investors are focusing on Thursday’s Initial Jobless Claims data. TD Securities analysts noted that the data will be scrutinized for indications of slowing economic activity, particularly in the employment sector.
Additionally, major Asian central banks have not been active in purchasing physical gold. Reports from the World Gold Council indicate that China has not bought gold for the third consecutive month.
