Key points:
Gold prices remained steady at $2,657.13 per ounce on Thursday, as traders focused on growing turmoil in the Middle East and awaited key U.S. economic data that could influence interest rate expectations.
U.S. gold futures dipped slightly by 0.05% to $2,658.47, signalling that many are still hedging against uncertainty. In light of the rising geopolitical risks, the resilience of gold reflects traders’ confidence in the metal’s safe-haven status.
See: Gold prices remain steady, trading at 2657.20 as seen on the VT Markets app.
Market participants remain cautious about the implications of the escalating conflict between Israel and Hezbollah, with fresh airstrikes in Beirut heightening concerns. With the death toll rising, risk sentiment has shifted, with safe assets like gold coming into focus.
Any prolonged military conflict could push gold prices higher as traders seek refuge from the volatility of other assets.
In addition to geopolitical risks, traders are awaiting U.S. economic data, such as ISM services data and initial jobless claims, due later in the day. On Friday, the U.S. nonfarm payrolls report will be released, which could sway expectations around another rate cut.
The recent ADP National Employment report showed U.S. private payrolls increased by more than expected in September, suggesting the labour market remains robust.
The U.S. Federal Reserve’s recent half-percentage-point rate cut has already acknowledged the economy’s divergence from earlier policy decisions, but traders remain divided on future rate reductions.
The CME FedWatch Tool shows that market expectations for a 50-bps cut in November have decreased to 35%, down from 53% just last week. Lower interest rates generally bolster gold by reducing the opportunity cost of holding it, particularly in times of economic or political uncertainty.
Also read: Dollar Firms as Traders Assess Federal Reserve’s Rate Path
Elsewhere, Perth Mint reported gold sales in September surged to their highest in 10 months, further underscoring the renewed interest in safe-haven assets. Sales of silver also rose to a seven-month high, though spot silver dipped 0.3% to $31.76 per ounce.
Platinum and palladium also posted modest gains, with platinum up 0.3% to $1,005.65, and palladium edging higher to $1,016.25.
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