Gold climbing as bulls push the price higher after a brief correction.
On Tuesday, gold (XAUUSD) recovered into the $2,650s after falling following an easing of tensions in the Middle East. This followed an exclusive from The Wall Street Journal (WSJ) in which Israeli Prime Minister Benjamin Netanyahu reportedly promised US President Joe Biden that he would exclusively strike military targets in Iran during the anticipated reprisal.
This, and a continuous decrease in the market Bets that the Federal Reserve (Fed) may cut interest rates are pushing the US Dollar (USD) higher and dragging on the gold price. US survey data also shows that inflation expectations remain elevated, with the latest Michigan Consumer Sentiment Survey indicating expectations in the long-term (5-10 years) have “skyrocketed” to 7.1% in October, “the highest in 40 years” according to experts at The Kobeissi Letter.
Concerns over China, the world’s largest gold buyer, and its economic slowdown add to the pressure, particularly after market disappointment over Beijing’s lack of clarity about its much-anticipated fiscal stimulus program.
Gold will continue to profit from central bank demand.
However, gold is being supported by expectations of ongoing healthy demand from global central banks. The precious
Metal has seen a surge in demand from this sector in recent years. As central banks store gold for safety, liquidity, and as a hedge against currency depreciation. While central bank buying has decreased in 2024, it projected to remain a significant factor. According to statements made by the CEOs of three central banks at a recent panel discussion at the London Bullion Market Association (LBMA).
Representatives from the Central Bank of Mongolia, the Czech Republic. And Mexico “all agreed that gold’s role as a reserve asset in global foreign reserves will continue to grow, even though each central bank views the precious metal differently within its portfolio,” according to Kitco News.
Gold market moves on the calendar
The gold price anticipated to On Tuesday, let the words rather than the statistics guide your decision. Speeches by three Fed officials, including San Francisco Fed President Mary Daly, Fed Governor Adriana Kugler, and Atlanta Fed President Raphael Bostic, might all have an impact on the price of the precious metal if they influence market expectations of the path of interest rates.
On the data front, the NY Empire State Manufacturing Index is the metric of the day for the greenback, with potential implications for gold.
