Bullion was steady after jumping 1.1% on Friday as Israel stepped up its ground operations. Tel Aviv sent troops and tanks into the northern Gaza Strip in what it called the second and longer phase of its war against Hamas, taking a day-by-day approach. This has eased fears that a massive invasion could lead to a regional escalation.
Gold has been one of the biggest winners since Hamas attacked Israel on 7 October, rising more than 9% as demand for haven assets increased. It’s likely to continue to benefit as tensions rise, along with the Swiss franc and short-term US Treasuries.
The conflict has replaced the US interest rate path and Treasury yields as the main drivers of gold prices. Nevertheless, interest rate decisions from major central banks – including the Federal Reserve – will be closely watched this week for their impact on borrowing costs.
Spot gold was down 0.1% at $2,003.57 an ounce as of 8:20 a.m. in Singapore. The Bloomberg Dollar Spot Index was up 0.1%. Silver and platinum were slightly lower, while palladium was steady.
