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Gold price demonstrated a spectrum of price movements on Tuesday. That consolidating recent gains. Market observers maintained a vigilant stance. As they closely tracking developments in the ongoing Middle East conflict. Additionally, attention shifted towards a series of significant U.S. economic indicators scheduled for release later in the week.
The immediate demand for gold continued to find support, as spot prices elevated in response to heightened safe-haven demand amid the persistent Middle East turmoil. Nonetheless, a decrease in gold futures signaled the ongoing apprehension among investors regarding the prospect of sustained higher interest rates.
Conversely, a decline in the U.S. dollar and yields from their recent peaks offered some respite to the price dynamics of bullion.
Spot gold inched upward by 0.1%, reaching $1,975.71 per ounce. While gold futures maturing in December contracted by 0.1% to $1,986.55 per ounce, as of 00:14 ET (04:14 GMT). Both of these financial instruments remained in close proximity to a nearly three-month high.
Gold’s Surge Amidst Geopolitical Unrest and Economic Anticipation
Over the past fortnight, Gold price witnessed substantial appreciation, primarily attributed to the outbreak of the Israel-Hamas conflict, prompting investors to seek refuge in safe-haven assets. Currently, markets remain cautiously attentive to any potential escalation in the conflict, even though recent diplomatic endeavors by several world powers appear to have mitigated the likelihood of a major escalation.
In parallel, Treasury yields eased from multi-month peaks at the commencement of this week. Simultaneously, the U.S. dollar experienced a modest decline as financial markets adopted a cautious posture ahead of a slew of prominent economic indicators scheduled for release this week.
The impending release of the U.S. Purchasing Managers’ Index (PMI) data, later on Tuesday, is expected to provide illuminating insights into business activities amidst elevated interest rates and persistent inflation.
Gold Price as Yield Surge in the light of Jerome Powell’s speech
Scheduled for Wednesday, Federal Reserve Chair Jerome Powell’s speech is poised to offer further elucidation regarding the trajectory of monetary policy. Powell recently reiterated the Federal Reserve’s commitment to maintaining higher interest rates and kept open the possibility of an additional rate hike within the current year.
Also Read: Gold Holds Steady Near $1920 Amidst Rising Safe-Haven Demand
Powell’s speech precedes a forthcoming Federal Reserve meeting, where it is widely anticipated that interest rates will remain unaltered.
Later in the week, we expect the release of Q3 U.S. GDP data, along with the PCE inflation data, the Federal Reserve’s preferred inflation gauge, on Friday. Signs of economic strength and ongoing inflation could reinforce the Fed’s commitment to higher interest rates, potentially impacting gold prices negatively.
Furthermore, the luster of gold’s safe-haven appeal may dim if U.S. economic growth persists in its stability.
Between Gold Price as Yield Surge and industrial metals
In the domain of industrial metals. copper prices registered a marginal increase on Tuesday. Which made it recovering from a near one-year low.
This recovery in the valuation of the red metal was partly attributed to diplomatic exchanges between U.S. and Chinese officials. That fueling speculations among traders that it might engender improved relations between these economic behemoths. However, obstacles, especially those linked to China’s real estate market, limited significant gains.
Copper futures, with an expiration date in December, recorded a 0.4% uptick, reaching $3.5927 per pound.
Copper market enthusiasts will closely watch U.S. economic data releases this week.
Any sign of manufacturing sector strength may boost copper demand. Despite global economic challenges, the copper outlook remains grim.
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Disclaimer:
Please note that this article serves solely for informational purposes. As such, it is not financial advice. We strongly advise readers to conduct thorough research and consult with financial professionals before making any investment decisions.
