Oct 23 (Reuters) – Safe-haven gold eased on Monday, pausing after coming within striking distance of the key $2,000 level in the previous session, as traders positioned themselves for further developments in the Middle East conflict and U.S. economic data.
Spot gold was down 0.3% at $1,976.19 an ounce by 13:41 ET (1741 GMT). US gold futures settled 0.3% lower at $1,987.80.
“Safe-haven demand will continue to drive gold higher after a slight period of consolidation. We believe geopolitical tensions and uncertainty in the Middle East will continue to drive prices higher,” said David Meger, director of metals trading at High Ridge Futures.
Bullion has rallied around 9% in the past two weeks as investors sought to hedge against the risk of a wider escalation in the war between Israel and Hamas.
However, “while not a negative signal, it is a red flag and the momentum (in gold) that previously existed has not been regained in early trading this week, which could lead to some profit taking,” said Craig Erlam, senior market analyst at OANDA, in a note.
Also in focus are Friday’s US PCE price index – the Federal Reserve’s preferred inflation gauge – and Thursday’s third quarter US GDP figures.
“If the inflation data comes in higher than expected, it will raise concerns about rising interest rates, to which gold may see a knee-jerk reaction to the downside, but safe-haven demand should kick in afterwards,” Meger added.
Silver was down 1.3% at $23.05 an ounce, platinum was up 0.3% at $897.58 and palladium was up 3% at $1,131.03.
“Sluggish BEV (battery electric vehicle) sales growth and an increase in palladium-containing light vehicles this year are expected to contribute to a slight improvement in Chinese palladium autocatalyst demand this year,” Heraeus analysts wrote in a note.
