Gold trades with a positive bias for the third day in a row.
The gold price (XAUUSD) rose sharply on Wednesday, reaching its highest level since early August, at $1,962-1,963. In response to the potential of escalation in the Middle East crisis. However, a further rise in US Treasury bond yields, fueled by predictions. That the Federal Reserve (Fed) will hold interest rates higher for longer, limited gains for the non-yielding yellow metal. Aside from that, a pickup truck Demand for the US Dollar (USD) drove some profit taking at higher levels, resulting in a minor reversal.
Geopolitical threats are still driving demand for the safe-haven XAUUSD.
The retracement decline, on the other hand, lacked momentum. And halted at $1,938. Geopolitical uncertainties continue to fuel some shelter flows. Allowing gold to trade in positive territory for the third day in a row on Thursday. Bulls, on the other hand, are hesitant to initiate aggressive wagers and prefer to sit on the sidelines ahead of Fed Chair Jerome Powell’s address. Traders will be on the lookout for new clues regarding the Fed’s future rate-hike path. Which will push the USD and offer some major impetus to the XAUUSD.
Daily Market Movers: The gold price is still being supported by the Israel-Hamas conflict.
The safe-haven gold price continues to gain traction. From fears that the Israel-Hamas war might spread to the rest of the Middle East.
Egyptian and Palestinian leaders canceled a meeting with US Vice President Joe Biden. After a bombing at a Gaza hospital killed hundreds of Palestinians.
According to the UK Times, Israeli Prime Minister Binyamin Netanyahu has received confidential approval. From President Biden to proceed with a ground assault of Gaza.
Biden stated that the US will ensure that Israel has the resources it requires to defend itself. And that Hamas has perpetrated crimes that make ISIS appear more sensible.
The positive US Retail Sales statistics reported on Tuesday indicated that the economy finished the third quarter on a high note, raising Q3 GDP predictions.
Data was also pushed up. Fears of sticky inflation may allow the Fed to maintain its hawkish posture and keep interest rates higher for longer.
This, in turn, leads to a further rise in US Treasury bond rates and supports the US Dollar, limiting gains for the XAUUSD.
The yield on the benchmark 10-year US government bond has reached a new 16-year high and is now within striking distance of the crucial 5% level.
Investors are now looking for short-term stimulus in the form of US Weekly Initial Jobless Claims, the Philadelphia Fed Manufacturing Index, and Existing Home Sales data.
The attention will be on Fed Chair Jerome Powell’s scheduled speech, which will be keenly studied for clues about future interest rates.
