Gold futures closed higher for the second consecutive day on Thursday, October 26, driven by ongoing Middle East tensions that spurred demand for safe-haven assets. Nevertheless, concerns regarding elevated interest rates put a damper on the contract’s gains throughout the day.
Gold futures witnessed an increase of $2.50, equivalent to 0.13%, closing at $1,997.40 per ounce. In contrast, silver experienced a decline of 9.90 cents, or 0.43%, settling at $22.908 per ounce. Platinum futures also saw a decrease of $3.40, or 0.37%, concluding at $909.00 per ounce. Palladium futures, on the other hand, rose by $9.20, representing a 0.8% increase, with a closing price of $1142.80 per ounce.
The continued tensions in the Middle East played a significant role in boosting gold’s appeal as a safe-haven investment. Russian President Vladimir Putin warned of the potential for the conflict between Israel and Hamas to extend beyond the Middle East, suggesting the involvement of anonymous actors seeking to escalate the situation and involve other nations.
Nonetheless, the gold market faced downward pressure during the day due to concerns that the Federal Reserve (Fed) might maintain higher interest rates for a longer duration than anticipated. This concern arose following the release of the US Gross Domestic Product (GDP) figures, which indicated the strongest growth in nearly two years.
The US Department of Commerce’s initial GDP estimate for the third quarter of 2023 revealed a 4.9% expansion, surpassing analysts’ expectations of 4.7%, following growth rates of 2.0% and 2.1% in the first and second quarters, respectively.
Furthermore, the US Department of Commerce disclosed that orders for durable goods in the United States, including items like airplanes, automobiles, and heavy machinery with a useful life of three years or more, increased by 4.7% in September, outpacing analysts’ forecasts of a 2.0% rise after a marginal 0.1% increase in August.
Investors are closely monitoring the release of the US Personal Consumption Expenditures (PCE) price index for September, a key inflation metric used by the Fed. This index is valued for its ability to detect shifts in consumer behavior and its broader coverage of prices for goods and services compared to the Consumer Price Index (CPI).
The Spot Market is Open
Friday, October 27, 2023