Gold prices made a slight upward move on Wednesday, buoyed by a decrease in U.S. Treasury yields. However, the precious metal appeared to lack the momentum required for a substantial rise, as the safe-haven demand for bullion showed signs of fatigue. This phenomenon occurred in the wake of international efforts to prevent the Israel-Hamas conflict from escalating further.
Gold’s Modest Gain: Spot gold witnessed a 0.3% increase, reaching $1,975.61 per ounce by 0227 GMT. This uptick followed two consecutive sessions of decline, with gold trading below the five-month highs achieved the previous week. U.S. gold futures remained stable at $1,986.70.
Analyst Insights: Matt Simpson, senior analyst at City Index, noted, “Gold had a remarkable run, rallying over 10% in ten days towards the crucial resistance level at $2,000. However, every surge requires a pause, and it seems we have reached that phase.”
Market Outlook: Simpson further commented, “For now, intraday movements may carry less significance with major events like the release of U.S. GDP figures, Powell’s speech, and a U.S. inflation report on the horizon. Nevertheless, with the situation in the Middle East showing signs of not immediately escalating, gold may face challenges in breaking the $2,000 mark. Nonetheless, gold bulls may be tempted to buy during dips above $1,950.”
Global Concerns: Investors continue to closely monitor the conflict in the Middle East as world leaders advocate for either a pause or ceasefire in the fighting between Israel and Hamas in the Gaza Strip. The primary aim is to facilitate the delivery of humanitarian aid to the besieged Palestinian civilians.
Upcoming Economic Data: Markets are anxiously awaiting the release of U.S. GDP figures for the third quarter, scheduled for Thursday, and the PCE (Personal Consumption Expenditures) price index to be unveiled on Friday. These indicators will provide valuable insights in the lead-up to the Federal Reserve’s policy decision next week.
Currency and Yields: The dollar index showed a slight decline, and benchmark U.S. 10-year Treasury yields edged lower as investors participated in a recent sell-off, driven by concerns about the potential economic impact of higher borrowing costs.
Other Precious Metals: Alongside gold, other precious metals also exhibited movements. Spot silver remained unchanged at $22.94 per ounce, platinum recorded a 0.3% increase, reaching $886.54, and palladium advanced by 0.9%, reaching $1,129.18.
Anglo American Platinum: South Africa’s Anglo American Platinum disclosed a 9% decline in its refined platinum group metal (PGM) output for the third quarter. This drop was attributed to disrupted water supplies to its processing facilities and lower concentrate production.
