Fears over the Middle East drive up gold prices in early trade

26 Oct 2023 , 10:08 AM

The Middle East war continued to worry investors on Thursday, as gold prices increased somewhat. Bullion held steady despite rising bond yields and the US currency.

Spot gold had increased 0.3% to $1,985.89 per ounce. At $1,996.30, U.S. gold futures saw a 0.1% increase.

As it prepared for a ground invasion, Israel continued to hit Hamas sites in Gaza, and foreign powers at the UN failed to obtain plans to send vital humanitarian relief.

Ahead of the Federal Reserve’s rate announcement the following week, investors are awaiting the release of the third-quarter U.S. GDP figures later in the day and the PCE price index on Friday.

Following data showing new-home sales jumped to a 19-month high in September, the dollar and benchmark U.S. 10-year Treasury yields increased, supporting market predictions of sustained high rates through 2024.

In other news, the European Central Bank will end a 15-month run of rate hikes on Thursday by leaving interest rates unchanged at a record high.

According to Metals Focus, the rise in artificial intelligence should help the industrial demand for precious metals in 2019, however short-term obstacles could include rising interest rates and financial worries.

According to the China Gold Association, China’s gold consumption increased 7.3% in the first three quarters of 2023 compared to the same period last year.

The largest exchange-traded fund backed by gold in the world, SPDR Gold Trust, reported a 0.2% increase in its holdings on Wednesday.

Sibanye Stillwater stated on Wednesday that 4,095 jobs may be lost as a result of a proposed reorganisation that could see it close four profitable platinum group metal (PGM) shafts in South Africa.

Spot silver increased by 0.1% to $22.92 per ounce, while palladium decreased by 0.6% to $1,119.14 and platinum dropped by 0.4% to $898.88.

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