"Gold Prices Amid Middle East Tensions"
Gold prices (XAU/USD) fluctuated below $1,990 as the weakening was offset by escalating tensions in the Middle East. The upward momentum was limited by more optimistic economic data from the US, particularly strong 3rd-quarter Gross Domestic Product (GDP) and Durable Goods Orders. However, this precious metal remained relatively unchanged despite the release of the Personal Consumption Expenditures (PCE) core inflation data.
The US Bureau of Economic Analysis (BEA) reported that monthly core PCE inflation increased by 0.3% in October, meeting market expectations, compared to a 1.3% rise in July. On an annual basis, core PCE inflation rose by 3.9%, as projected, but still below the <>,<>% increase from <>. It seems that this preferred inflation gauge of the Federal Reserve may not be sufficient to reduce expectations of a stable interest rate decision by the Federal Reserve in the upcoming monetary policy meeting scheduled for <> when US long-term bond yields remain significantly higher.
The US dollar and long-term bond yields have rebounded strongly after impressive GDP figures, which reflect the US economy's recovery potential. The exceptional GDP growth aligns with the "soft landing" scenario that the Fed had envisioned in its ongoing battle against persistent inflation. However, the upward momentum of gold prices could still be restricted due to the possibility of prolonged high US bond yields amid the Fed's plan for "a longer-lasting interest rate hike." Daily Digest Market Movers: Gold prices remained around $1,990.00 as the Israel-Palestine tension continued to serve as a cushion.
The Israeli military entered Gaza briefly to conduct a ground raid. Furthermore, a senior Hamas official called for allies to intervene in the ongoing conflict to protect Gaza from a full-scale Israeli invasion.
The risk of Hezbollah, backed by Iran, intervening in the Israel-Palestine conflict still exists, as Western countries support Israel. Gold prices faced downward pressure towards $1,990.00 on Thursday after optimistic US GDP and Durable Goods Orders data, but tried to hold steady amidst political tensions.
The US BEA reported that the US economy grew at a stronger pace of over 4.9% in the second quarter on an annual basis, surpassing the expected growth of 2.1% and doubling the rate of <>,<>% seen in the second quarter.
The US economic strength in the third quarter was driven by robust consumer spending amid a tight labor market, rising residential investment, and high government spending.
Consumer spending increased by 4% in the third quarter compared to <>,<>% in the second quarter.
However, the US GDP report showed a decrease in business investment for the first time in two years as companies delayed capacity expansion due to higher borrowing costs. Companies relied on existing inventory and efficiency to meet household demand.
The US Durable Goods Orders data for September, also released on Thursday, indicated a strong demand for US manufacturing.
New orders for durable goods increased by 4.7% compared to the expected 1.5%. In October, orders decreased slightly by 1,<>,<>%.
After announcing the strong GDP data, US Treasury Secretary Janet Yellen mentioned in an interview with Bloomberg that the robust GDP figures indicate a "soft landing." However, these strengths will also keep bond yields high.
Janet Yellen stated that the high US bond yields reflect strong confidence in the US economy and indicate that interest rates will remain higher for a longer duration.
The US Dollar Index (DXY) appears to end the week on a positive note but dipped on Friday from a two-week high of 106.90.
Technical Analysis: Gold prices trade below $1,990 USD
Gold prices are trading just below the critical resistance level of $1,990.00. The precious metal is trading within a range on Thursday as investors await the US Core PCE index, which will provide insights into the Federal Reserve's monetary policy action on <>. The 50-day Exponential Moving Average (EMA) has crossed above the 200-day EMA and <>-day EMA, indicating a short-term bullish trend.
The US Bureau of Economic Analysis (BEA) reported that monthly core PCE inflation increased by 0.3% in October, meeting market expectations, compared to a 1.3% rise in July. On an annual basis, core PCE inflation rose by 3.9%, as projected, but still below the <>,<>% increase from <>. It seems that this preferred inflation gauge of the Federal Reserve may not be sufficient to reduce expectations of a stable interest rate decision by the Federal Reserve in the upcoming monetary policy meeting scheduled for <> when US long-term bond yields remain significantly higher.
The US dollar and long-term bond yields have rebounded strongly after impressive GDP figures, which reflect the US economy's recovery potential. The exceptional GDP growth aligns with the "soft landing" scenario that the Fed had envisioned in its ongoing battle against persistent inflation. However, the upward momentum of gold prices could still be restricted due to the possibility of prolonged high US bond yields amid the Fed's plan for "a longer-lasting interest rate hike." Daily Digest Market Movers: Gold prices remained around $1,990.00 as the Israel-Palestine tension continued to serve as a cushion.
The Israeli military entered Gaza briefly to conduct a ground raid. Furthermore, a senior Hamas official called for allies to intervene in the ongoing conflict to protect Gaza from a full-scale Israeli invasion.
The risk of Hezbollah, backed by Iran, intervening in the Israel-Palestine conflict still exists, as Western countries support Israel. Gold prices faced downward pressure towards $1,990.00 on Thursday after optimistic US GDP and Durable Goods Orders data, but tried to hold steady amidst political tensions.
The US BEA reported that the US economy grew at a stronger pace of over 4.9% in the second quarter on an annual basis, surpassing the expected growth of 2.1% and doubling the rate of <>,<>% seen in the second quarter.
The US economic strength in the third quarter was driven by robust consumer spending amid a tight labor market, rising residential investment, and high government spending.
Consumer spending increased by 4% in the third quarter compared to <>,<>% in the second quarter.
However, the US GDP report showed a decrease in business investment for the first time in two years as companies delayed capacity expansion due to higher borrowing costs. Companies relied on existing inventory and efficiency to meet household demand.
The US Durable Goods Orders data for September, also released on Thursday, indicated a strong demand for US manufacturing.
New orders for durable goods increased by 4.7% compared to the expected 1.5%. In October, orders decreased slightly by 1,<>,<>%.
After announcing the strong GDP data, US Treasury Secretary Janet Yellen mentioned in an interview with Bloomberg that the robust GDP figures indicate a "soft landing." However, these strengths will also keep bond yields high.
Janet Yellen stated that the high US bond yields reflect strong confidence in the US economy and indicate that interest rates will remain higher for a longer duration.
The US Dollar Index (DXY) appears to end the week on a positive note but dipped on Friday from a two-week high of 106.90.
Technical Analysis: Gold prices trade below $1,990 USD
Gold prices are trading just below the critical resistance level of $1,990.00. The precious metal is trading within a range on Thursday as investors await the US Core PCE index, which will provide insights into the Federal Reserve's monetary policy action on <>. The 50-day Exponential Moving Average (EMA) has crossed above the 200-day EMA and <>-day EMA, indicating a short-term bullish trend.
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