Gold Prices Surge Amid Middle East Conflict, Fed Meeting Looms
Gold prices have surged above the key $2,000 level as tensions escalate in the Middle East, driving investors toward the safe-haven metal. In addition to the geopolitical unrest, market participants are preparing for the U.S. Federal Reserve’s policy meeting scheduled for this week.
The spot price of gold experienced a marginal 0.1% decrease to reach $2,003.18 per ounce by 0119 GMT, while U.S. gold futures climbed 0.8% to $2,013.40. On Friday, gold prices exceeded the psychological $2,000 level for the first time since mid-May, driven by concerns over the Israel-Hamas conflict and potential global economic repercussions.
Recent developments in the Middle East have intensified as Israeli troops, supported by tanks, launched a ground assault into the northern Gaza enclave. Palestinians have reported intense air and artillery strikes, further escalating the conflict.
On the economic front, the Commerce Department reported a surge in U.S. consumer spending during September, while monthly inflation remained warm. Looking ahead to next year, economists polled by Reuters anticipate high inflation to persist, with three-quarters of respondents citing it as the main risk. This expectation suggests that interest rates may also remain elevated for a longer period.
According to data from the U.S. Commodity Futures Trading Commission, speculators on COMEX increased their net long position by 48,815 contracts to 90,682 in the week ending October 24. This indicates growing bullish sentiment toward gold.
In Europe, Swiss precious metals refinery Valcambi has withdrawn its membership from the Swiss Association of Precious Metal Manufacturers and Traders (ASFCMP) after 40 years. The reasons behind this decision remain undisclosed.
Regarding gold demand in key markets, physical purchases during a major festival in India improved last week, although at a slower pace compared to the previous year. In China, the largest consumer of gold, premiums have declined further.
As for other precious metals, spot silver decreased by 0.3% to $23.07, platinum fell by 0.3% to $900.74, and palladium maintained stability at $1,121.88.
Looking ahead, economic data and events scheduled for the day include the release of the EU Consumer Confidence Final for October, the Germany CPI Preliminary Yearly Rate for October, and the Bank of Japan’s monetary policy meeting, which will continue until October 31.
The surge in gold prices, driven by increasing tensions in the Middle East and anticipation of the U.S. Federal Reserve’s policy meeting, has captured the attention of investors seeking a safe-haven asset. With ongoing conflicts and economic uncertainties, the demand for gold is expected to remain robust in the near term.
