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Gold Tests remained resilient in the Asian trading session, testing the $2,000 mark. The yellow metal defied the resurgence of the dollar and yields, driven by a demand surge for traditional safe-haven assets.
Middle East Tensions Drive Demand for Gold
Fears of an escalation in the Israel-Hamas conflict lingered, as Gaza endured missile strikes, and Israel reaffirmed its commitment to a ground offensive. Amid this uncertainty, gold continued to be the preferred safe-haven choice, unaffected by the rising dollar and Treasury yields.
Spot Gold TestsInches Up
Spot gold recorded a 0.5% increase, reaching $1,988.85 per ounce. Meanwhile, gold futures set to expire in December saw a 0.2% gain, reaching $1,999.20 an ounce by 00:53 ET (04:53 GMT).
US Economic Data and Federal Reserve Meeting Pose Risks
However, despite the favorable conditions for gold, it still faces risks from impending U.S. economic reports. The third-quarter U.S. Gross Domestic Product (GDP) data, scheduled for release later in the day, is projected to show a significant growth surge.
The potential strengthening of the U.S. economy is likely to boost investor confidence. Nevertheless, it also provides the Federal Reserve with more flexibility to maintain higher interest rates. Additionally, PCE inflation data for September, the Fed’s preferred inflation measure, is set to be disclosed on Friday.
The central bank is expected to keep rates unchanged in its upcoming meeting. Nevertheless, Fed officials have hinted at the possibility of at least one more rate hike this year, given persistent inflation and a robust economy. These factors may deter investment in gold tests due to the increased opportunity cost.
Read More: US-Russian Price Cap Enforcement Shifts Focus to the World’s Ghost Fleet
European Central Bank’s Meeting and Copper Prices
Before the Federal Reserve meeting, the European Central Bank is also convening to discuss its rates. While the ECB is anticipated to keep rates steady, they are likely to signal a prolonged period of higher rates, despite concerns of an impending euro zone Gold Tests recession.
Copper Prices Await U.S. GDP Data
In the realm of industrial metals, copper prices stabilized after recent losses. The focus remains squarely on the upcoming U.S. GDP reading.
Copper futures inched up by 0.1% to $3.5903 per pound. However, copper prices have not significantly benefited from recent Chinese stimulus measures due to concerns of a looming euro zone recession and the potential impact on copper demand in the coming months.
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Disclaimer:
Please note that this article serves solely for informational purposes. As such, Gold tests it is not financial advice. We strongly advise readers to conduct thorough research and consult with financial professionals before making any investment decisions.
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