Gold prices rose on Thursday as investor anxiety over the Middle East conflict continued, with the yellow metal, considered a safe haven, holding steady despite the strengthening dollar and rising U.S. Treasury yields. As of 03:48 GMT, spot gold increased by 0.4 percent to $1986.79 per ounce. U.S. gold futures also rose 0.1 percent to $1997.10.
The dollar and 10-year Treasury yields increased after data indicated that new home sales rose to their highest level in 19 months in September, reinforcing market expectations that interest rates would remain elevated for an extended period into 2024. Investors are now anticipating U.S. GDP figures for the third quarter later today and the Personal Consumption Expenditures price index tomorrow before next week’s Federal Reserve interest rate decision.
Nikos Kavalis, Managing Director of Metals Focus, stated, "It is clear that the Federal Reserve sees high interest rates as a means to curb inflation." Kavalis added that there is nothing stopping them from announcing another hike since the U.S. economy is very strong.
Meanwhile, the European Central Bank is expected to keep interest rates unchanged at a record high on Thursday, ending a 15-month streak of increases.
On the geopolitical front, Israel continued its assaults on Gaza while preparing for a ground invasion, with global powers failing to reach agreements at the United Nations on plans to deliver vital humanitarian aid to the region. Gold is often sought after as a safe-haven asset during times of economic and political turmoil, although high interest rates diminish the appeal of non-yielding bullion.
In other precious metals, silver rose 0.2 percent in spot trading to $22.93 per ounce. Platinum fell 0.4 percent to $899.50, and palladium decreased by 0.1 percent to $1124.80.
