Focusing on the Middle East, gold prices rise while US bond yields decline

25 Oct 2023 , 10:17 AM

Lower U.S. Treasury yields largely drove Wednesday’s increase in gold prices; but, the safe-haven demand for metal began to wane as world leaders attempted to stop the Israel-Hamas conflict from getting worse.

Following two sessions of declines, spot gold climbed 0.2% to $1,974.29 per ounce, trading below five-month highs reached last week. At $1,985.40, US gold futures were stable.

As international leaders pleaded for a pause or ceasefire in the fighting between Israel and Hamas in the Gaza Strip to allow humanitarian aid to reach beleaguered Palestinian civilians, investors were keeping a careful eye on the Middle East conflict.

Amidst worries about the potential effects of increased borrowing costs on the economy, investors bought into a recent sell-off, which resulted in a little decline in the benchmark 10-year Treasury yield.

According to surveys released on Tuesday, U.S. business activity increased somewhat in October while output in the euro zone unexpectedly declined. This highlights the different paths central bankers take in the two regions and fuels concerns that the unit may enter a recession.

Investors are anticipating the release of the third-quarter U.S. GDP figures on Thursday and the U.S. PCE price index on Friday.

Anglo American Platinum, based in South Africa, reported on Tuesday that lower concentrate production and interrupted water supplies to its processing facilities caused a 9% decrease in the company’s refined platinum group metal (PGM) output during the third quarter.

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