Gold maintains its recent strong rise and remains above the $2,000 barrier.
The gold price (XAUUSD) broke beyond the $2,000 psychological barrier on Friday, reaching its highest level since May 16 and marking a third weekly gain. An intensification in the Israel-Hamas conflict fuels safe-haven buying and serves as a tailwind for gold.
Traders, on the other hand, are refraining from placing new positive wagers and prefer to remain on the sidelines ahead of this week’s critical central bank meeting. bank event risks. The Bank of Japan (BoJ) will publish its policy decision on Tuesday, followed by the Federal Reserve (Fed) monetary policy update on Wednesday and the Bank of England (BoE) meeting on Thursday.
Investors will also look to China’s official PMIs.
This week, investors will also look to China’s official PMIs for clues on business activity in the world’s second-largest economy. Aside from that, the preliminary Eurozone GDP and CPI figures, as well as the US monthly jobs data (NFP), could provide some major support to the gold market.
Meanwhile, the possibility of further Fed policy tightening continues to support the US Dollar (USD) and keep XAUUSD bulls on the defensive into the Asian session on Monday. The However, the lack of any follow-through selling should be viewed with caution by aggressive bearish traders before preparing for any substantial corrective slide in the commodity.
The gold price is hovering around $2,000 as the Israel-Hamas crisis continues to drive refuge flows.
On Monday, the gold price managed to maintain above the psychological level of $2,000, drawing support from the growing possibility of an escalation of geopolitical tensions in the Middle East.
Palestinians in northern Gaza reported intense air and artillery bombardment early Monday as Israeli troops, backed by tanks, launched a ground assault on the embattled region.
On Friday, the US Commerce Department announced that consumer spending climbed more than predicted in September, and that monthly inflation accelerated throughout the reporting period. This follows the positive Advance US GDP data, which revealed that the world’s largest economy grew at its highest rate in over two years in the third quarter.
The resiliency of the US economy should allow the Federal Reserve (Fed) to maintain its hawkish attitude and keep hopes alive for another interest rate hike by the end of the year.
The hawkish perspective continues to support elevated US Treasury bond yields and boost the US Dollar, serving as a negative for gold.
Before putting new directional bets, traders are waiting for the outcome of a major two-day FOMC monetary policy meeting for hints about the future rate-hike path.
The Bank of Japan and the Bank of England will also meet. Their individual policy decisions will be announced, causing instability in global financial markets.
This week, investors will be watching the official Chinese PMIs, the flash Eurozone CPI and GDP print, and the closely regarded US jobs report (NFP).
