Gold bounced back on Wednesday from an early-week dip as the safe-haven metal continued to be supported by the Middle East conflict, which appears far from resolved.
Spot gold was up 0.6% at $1,983.66 an ounce by 11:55 a.m. EDT, hovering near its highest level in five months. US gold futures were up 0.3% at $1,992.20 an ounce.
Geopolitical concerns are not going away in the short term, which will continue to support gold, said Bob Haberkorn, senior market strategist at RJO Futures, in a Reuters note.
Israel’s military intensified its bombardment of southern Gaza overnight amid international calls for a pause in the fighting.
The Dollar Index and benchmark 10-year US Treasury yields edged higher, limiting gains for the metal.
Investors’ attention now turns to the US third quarter GDP figures due on Thursday and the US PCE price index on Friday, which could influence the Federal Reserve’s outlook for interest rates.
According to the CME FedWatch tool, markets widely expect the Fed to keep rates on hold at its meeting next month.
If the data shows a slowdown, it will give the Fed more reason not to raise rates, which should be very supportive for gold and push prices back above $2,000,” Haberkorn added.
US economic activity picked up in October while euro zone output surprisingly deteriorated, surveys showed on Tuesday, underlining the divergent paths of central banks in the two regions.
