Gold prices may encounter challenges surpassing the $2,000 per ounce mark, according to analysts, as investors keenly anticipate the release of significant U.S. economic data in the lead-up to the Federal Reserve’s forthcoming meeting.
Spot gold demonstrated a modest 0.3% increase, reaching $1,976.19 per ounce as of 1207 GMT, following declines in the previous two sessions. Simultaneously, U.S. gold futures inched up by 0.1%, settling at $1,987.30.
Ricardo Evangelista, a senior analyst at ActivTrades, noted the dual dynamics influencing gold’s trajectory. Geopolitical tensions and underwhelming economic data in Europe have bolstered the safe-haven appeal of gold. However, robust economic indicators from the United States are fostering expectations of the Federal Reserve maintaining higher interest rates for an extended period, potentially raising them again within the year. This scenario is likely to lend support to the U.S. dollar and Treasury yields, which can exert downward pressure on gold prices.
Recent surveys highlighted that U.S. business activity experienced a slight increase in October, while the euro zone saw an unexpected downturn in output. These divergent economic trends underscore the differing paths central banks in these regions are navigating.
Market attention has now shifted to the impending release of U.S. third-quarter GDP figures scheduled for Thursday and the U.S. PCE price index due on Friday. These data points have the potential to offer insights into the Federal Reserve’s outlook on interest rates.
The U.S. dollar index concurrently exhibited a 0.2% rise against its counterparts, rendering gold relatively more expensive for holders of other currencies.
On the geopolitical front, the Middle East conflict saw intensified military actions in southern Gaza, even as world leaders appealed for a ceasefire to facilitate humanitarian aid deliveries into the besieged enclave.
Matt Simpson, a senior analyst at City Index, commented on the evolving situation, suggesting that if the Middle East conflict does not immediately escalate, gold could face challenges in breaching the $2,000 mark. Nonetheless, he noted that gold enthusiasts might consider buying on any price dips above $1,950.
Gold’s allure as a safe-haven investment tends to heighten during times of political and financial uncertainty.
In contrast to gold, spot silver experienced a 0.4% decline, closing at $22.83 per ounce. Platinum registered a gain of 0.3%, settling at $886.65, while palladium saw an increase of 1.1%, reaching $1,131.89.
