Gold Prices Hold Steady as Investors Monitor Israel-Hamas Conflict and U.S. Economic Data
Gold Prices Trading in Mixed Range
Gold prices traded within a mixed range on Tuesday, maintaining recent gains as traders closely monitored the Israel-Hamas war and awaited key U.S. economic readings scheduled for this week. The conflict in the Middle East has fueled safe-haven demand for gold, while a drop in bond yields indicates caution among gold investors regarding higher interest rates.
Relief for Bullion Prices
Bullion prices received some relief as bond yields and the dollar retreated from recent peaks. Spot gold rose 0.1% to $1,975.71 an ounce, while gold futures for December fell 0.1% to $1,986.55 an ounce, remaining near a three-month high.
Israel-Hamas Conflict Impact
The onset of the Israel-Hamas war led to significant gains in gold prices over the past two weeks. While diplomatic efforts have helped prevent a major escalation, investors are still closely watching for any further developments in the conflict.
Yields and Dollar Retreat
Treasury yields and the dollar declined as markets anticipated key economic cues and awaited Federal Reserve Chair Jerome Powell’s speech. The upcoming U.S. Purchasing Managers’ Index (PMI) data is expected to provide insights into business activity amid high interest rates and stubborn inflation. Powell’s speech, scheduled for Wednesday, may offer additional cues on monetary policy.
Impact on Gold Prices
The Fed’s intention to maintain higher rates for an extended period, along with the possibility of a rate hike this year, could negatively impact gold prices. The upcoming U.S. third-quarter GDP data and the Fed’s preferred inflation gauge, set to be released later this week, will be crucial in determining the future of gold prices.
Copper Prices Recover
Copper prices experienced a slight recovery on Tuesday after hitting a one-year low. Traders speculated that improved dialogue between U.S. and Chinese officials could lead to better relations between the two economic giants. However, concerns over China’s property market continue to weigh on copper prices.
Outlook for Copper Demand
Copper bulls are closely monitoring U.S. economic readings, as manufacturing resilience could indicate strength in copper demand. However, with deteriorating economic conditions worldwide, the outlook for copper remains uncertain.
Overall, gold prices remain influenced by geopolitical tensions and U.S. economic data, while copper prices are impacted by global economic conditions and developments in U.S.-China relations.
