Gold prices dipped from their recent five-month high on Monday, influenced by a stronger U.S. dollar and rising Treasury yields. Investors are closely watching key economic data set to be released this week, seeking insights into the potential global impact of the Middle East conflict.
Spot gold saw a 0.3% decline, reaching $1,975.99 per ounce by 0552 GMT, while U.S. gold futures dropped 0.4% to $1,987.30.
Over the past two weeks, gold prices had surged approximately 9% to their highest levels since mid-May. This rally was largely attributed to investors seeking refuge in gold due to concerns that the Israel-Hamas conflict could escalate into a broader crisis.
IG market strategist Yeap Jun Rong noted, “Gold prices have been riding on safe-haven flows from the Middle East conflict lately, and focus on humanitarian aid and securing hostage releases seems to suggest that a potential ground invasion from Israel can wait. This may contain the risks of further escalation, at least for now, which may drive some near-term unwinding in prices, although any conflict escalation could easily renew traction in the safe-haven asset.”
Reflecting this investor sentiment, COMEX gold speculators switched to a net long position of 41,867 contracts in the week ending October 17, according to data released on Friday.
Analysts at TD Securities remarked, “There would need to be more instability such as a broadening of the conflict to the broader Middle East for the rally to continue. It is likely that gold may trend lower, given high rates for longer and a firm U.S. dollar.”
Beyond geopolitical concerns, investors will be closely monitoring economic indicators, including the U.S. PCE price index (the Federal Reserve’s preferred inflation gauge), U.S. GDP figures for the third quarter, the European Central Bank’s rate decision, and global flash PMIs for economic insights.
In the precious metals market, spot silver experienced a 0.4% decline to $23.25 per ounce, platinum slipped 0.4% to $891.07, and palladium rose by 0.3% to $1,100.84.
