Gold price rose to a one-week high.
In the aftermath of the rising Israeli-Palestinian crisis. The gold price (XAUUSD) gained more than 1% on Monday and ended above the mid-$1,800 level. The safe-haven precious metal, which tends to profit from political. And economic instability, is also benefiting from the continued corrective decline in US Treasury bond rates. Which is being driven by lower bets on more Fed rate rises. This, along with subdued The US Dollar (USD) price movement drives the non-yielding yellow metal up for the third day in a row on Tuesday. Reaching a one-week high.
The gold price has already rebounded more than $50 from a seven-month low reached last Friday. But it appears to be struggling to capitalize on the momentum. The overnight dovish statements by Fed officials enhance investors’ confidence. As seen by a generally upbeat tone in the equities markets, while limiting gains for the safe-haven XAUUSD. Investors are hesitant and prefer to remain on the sidelines before of this week’s important US releases. The FOMC meeting minutes on Wednesday and consumer inflation statistics on Thursday.
Daily Market Movers: The gold price extends its current advances to a one-week high.
The military crisis between Israel and the Palestinian Islamist party Hamas continued to fuel some haven flows. Boosting gold to a one-week high on Tuesday.
Fed policymakers were cautious about the need for more rate rises. Saying that the recent rise in long-term US Treasury bond rates will help the Fed fight inflation.
Dallas Fed President Lorie Logan stated that the progress on inflation is positive, prompting investors to reduce their expectations for another interest rate hike at the November meeting.
Fed Vice Chair Philip Jefferson sounded less aggressive, advising the central bank to tread carefully with any future rises in the benchmark federal funds rate.
The Fed’s rate-hike plan is being repriced, which leads to a further drop in US Treasury bond rates, which keeps US Dollar bulls on the defensive and favors the XAUUSD even more.
Markets, on the other hand, are still pricing in at least one more Fed rate rise by the end of this year, which should limit the downside for US bond rates and the USD.
Investors are now looking for clues regarding the Fed’s next policy move in the FOMC meeting minutes and US consumer inflation statistics, which are due on Wednesday and Thursday, respectively.
