Gold prices saw a decline on Monday after reaching their highest level in nearly a month. In the previous session, escalating fears surrounding the conflict between Israel and the Palestinian militant group Hamas drove the demand for safe-haven bullion, causing it to surge by over 3%.
Spot gold witnessed a 0.5% dip, settling at $1,921.69 per ounce by 0102 GMT, while U.S. gold futures experienced a 0.4% drop to $1,934.40.
Gold, often considered a safe investment during times of uncertainty, reached its peak since September 20, touching $1,934.82 earlier in the session. This surge marked a 3.4% gain on Friday, marking its most substantial one-day rise in seven months.
U.S. President Joe Biden expressed his belief that the Hamas militant group must be eliminated, but he also emphasized the importance of establishing a path to a Palestinian state. This comes after top U.S. officials warned that the war between Israel and Hamas could further escalate.
The Israeli-Hamas conflict has heightened concerns about rising geopolitical risks in financial markets. Investors are closely monitoring the situation to see if it might involve other countries, potentially driving up oil prices and posing a new threat to the global economy.
U.S. consumer sentiment has deteriorated in October, with households expecting higher inflation over the next year. Nevertheless, the strength of the labor market is expected to continue supporting consumer spending.
Data shows that COMEX gold speculators increased their net short position by 11,784 contracts, reaching 14,788 in the week ending October 10.
The physical gold market in India shifted to a discount last week as a rebound in domestic prices discouraged buyers. Meanwhile, premiums in China retreated from recent highs.
In the broader metal market, spot silver recorded a 0.4% fall to reach $22.62 per ounce, platinum eased by 0.2% to $879.19, and palladium remained steady at $1,147.55.
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