Gold prices showed resilience on Tuesday as benchmark U.S. Treasury yields pulled back, offering a glimmer of hope for investors. They continue to monitor the geopolitical developments, particularly the escalating tensions in the Middle East, while eagerly awaiting economic data releases that could offer critical guidance on interest rates.
As of 0349 GMT, spot gold exhibited a 0.2% increase, reaching $1,976.99 per ounce, while U.S. gold futures remained steady at $1,988.10.
The benchmark 10-year U.S. Treasury yield saw a decline after briefly surging above 5% on Monday, a development that raised concerns about a potential economic slowdown due to elevated borrowing costs.
Ilya Spivak, the Head of Global Macro at Tastylive, emphasized the pronounced influence of geopolitics on the gold market. He noted, “The importance of geopolitics and gold is really highlighted very clearly by how strong gold has been despite stronger bond yields. Once markets digest geopolitics, yields would become more of a meaningful factor.”
Amidst a backdrop of growing geopolitical tensions, gold continues to be perceived as a safe-haven investment, experiencing a robust 9% surge in the past two weeks, driven by concerns over conflicts, ultimately reaching five-month highs on October 20.
Investors maintain a vigilant eye on the Middle East conflict, as Israel’s military issued a statement indicating its intent to continue strikes on the Gaza Strip and suggesting readiness for a potential ground assault.
Additionally, global flash Purchasing Managers’ Index (PMI) data scheduled for later in the day, U.S. third-quarter Gross Domestic Product (GDP) figures set for Thursday, and the U.S. Personal Consumption Expenditures (PCE) price index to be released on Friday are all pivotal factors. They are essential in evaluating their potential impact on the monetary policy direction of the Federal Reserve.
Ilya Spivak further highlighted that for this data to exert meaningful influence, it would need to demonstrate outcomes that are significantly better or worse than the market’s expectations.
In the broader precious metals market, spot silver registered a 0.7% gain, reaching $23.15 per ounce, while platinum experienced a marginal 0.1% decline, settling at $895.66 per ounce. Palladium, on the other hand, showed a notable 1.1% increase, reaching $1,129.79 per ounce.
As gold prices find their footing amidst a complex landscape of economic factors and geopolitical tensions, investors remain attentive to these intricate variables for insights into the precious metal’s trajectory in the days ahead.
