Gold is range-bound as traders concentrate on the US rate situation and the Middle East crisis

27 Oct 2023 , 09:45 AM

With traders weighing the effects of the Middle East crisis against predictions that U.S. interest rates would remain higher for longer following the economy’s positive performance in the previous quarter, gold prices fluctuated in a range-bound trade on Friday.

Spot gold remained stable at $1,984.69 per ounce. At $1,994.30, U.S. gold futures were down 0.2%.

Overnight, as indignation increased in the Arab world over Israel’s relentless airstrikes on the besieged Palestinian territory, Israeli soldiers launched their largest ground attack in Gaza in their 20-day conflict with Hamas.

Once again, the U.S. economy outperformed grim predictions of a recession in the third quarter, growing at its strongest rate in almost two years.

U.S. Treasury Secretary Janet Yellen stated that although the country’s over 5% third-quarter economic growth was a positive indication that the economy was heading towards a soft landing, it might also keep longer-dated bond rates high.

On Friday, the dollar was forecast to rise for the week, and U.S. Treasury rates increased by 0.2% after lowering the previous day in response to the release of data on disposable income and inflation that was lower than anticipated.

Investors are also keeping an eye on the US personal consumption expenditure (PCE) price index in hopes of gaining insight into the Fed’s upcoming policy meeting.

In line with the recent decisions of the Federal Reserve and the Bank of England, the European Central Bank ended a 15-month run of rate hikes on Thursday by keeping interest rates constant.

China’s imports of gold through Hong Kong decreased by 11% in September compared to August, according to figures released on Thursday by the Hong Kong Census and Statistics Department.

Spot silver decreased by 0.1% to $22.80, palladium decreased by 0.1% to $1,132.11, while platinum increased by 0.3% to $902.72.

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