Gold prices remained largely stable on Tuesday, following a recent five-month high, as market attention remained divided between U.S. economic data and ongoing Middle East tensions.
Spot gold saw a modest 0.1% increase, reaching $1,975.39 per ounce by 12:42 p.m. ET (1742 GMT), bouncing back after an earlier 1% decline. Meanwhile, U.S. gold futures settled 0.1% lower at $1,986.1.
Jim Wyckoff, senior analyst at Kitco Metals, commented on the situation, stating, “We saw some profit taking earlier in the session, and then traders came to buy the dip… $2,000 is still (on the) cards for the near-term or even a new record high if there is an escalation in the Middle East crisis.”
Over the past two weeks, gold prices have climbed approximately 9%, hitting a five-month high of $1,997.09 on October 20, primarily driven by safe-haven inflows due to concerns about the Israel-Hamas conflict spreading.
However, some analysts suggest that gold’s inability to continue rallying this week may indicate that “safe-haven demand has started to wane, as markets learn to live with tensions in the Middle East,” as noted by Marios Hadjikyriacos, senior investment analyst at forex broker XM.
Gold’s gains were somewhat limited by the strengthening U.S. dollar index (.DXY), which made gold relatively more expensive for overseas buyers.
Market attention is now focused on the release of U.S. third-quarter GDP figures scheduled for Thursday and the U.S. PCE price index on Friday, as these data points could influence the Federal Reserve’s outlook on interest rates.
Chris Mancini, associate portfolio manager of the Gabelli Gold Fund, explained, “Direction of gold for the foreseeable future will be linked to the direction of interest rates. If the economy weakens, and there’s a view in the market that we are entering a recession, then interest rates will likely decline, and the price of gold will likely go up.”
In other precious metal news, spot silver remained flat at $22.97 per ounce, platinum dipped by 1.2% to $885.88, and palladium gained 0.8% to $1,127.04.
