On Monday (October 30th), COMEX December gold futures closed higher, marking the first time since July 31st of this year that they have closed above the psychologically high integer level of $2000 per ounce. On the same day, they closed at $2009.20 per ounce. Market participants should continue to closely monitor the headlines related to the Israeli-Palestinian conflict. The easing of the crisis may open the door for a significant downward adjustment in gold prices, which have risen by over 8% since the conflict between Palestine and Israel.
Spot gold closed 0.51% lower on Monday at $1996.09 per ounce.
COMEX December gold futures rose by over 0.35% to close at $2005.60 per ounce. COMEX February gold futures rose 0.36% to close at $2026.00 per ounce.
COMEX December silver futures rose 2.23% to close at $23.396 per ounce. COMEX January silver futures closed up 2.21% at $23.519 per ounce.
Market News Analysis
Gold prices fell slightly on Monday, but gold futures prices are still above the critical level of $2000 per ounce, as the uncertainty surrounding the Israeli-Palestinian conflict and the Federal Reserve meeting this week have boosted safe haven demand for gold.
Gold hit a high last week as the ongoing uncertainty of the Middle East conflict has led investors to lean towards traditional safe haven assets, and the market is watching to see if any other countries join the conflict.
On Monday, the US dollar index fell. The market is now focused on the end of Wednesday's two-day Federal Reserve meeting, and people generally expect the Federal Reserve to keep interest rates unchanged. But traders expect the Federal Reserve to reiterate its stance on long-term interest rate hikes, especially in recent times when Federal Reserve officials have still opened the door to at least one more rate hike this year. The expected release of non farm employment data on Friday will affect this outlook. The strong US economy also provides the Federal Reserve with greater space to maintain higher interest rates.
Higher interest rates do not bode well for gold as they increase the opportunity cost of investing in gold. With global interest rates rising, this view has hit gold prices hard in the past year. It is shown that inflation has rebounded again while economic growth remains resilient.
Richard Snow, a strategist at DailyFX, said that the bullish market for gold has cooled down, but the potential for strong upward momentum still exists. He said, "Gold is highly sensitive to political conflicts, so it is not surprising that this safe haven metal has risen exponentially in recent weeks, with a low point increase of nearly 10%." However, Snow also stated that as traders evaluate the overbought situation of the commodity and "closely monitor the latest negotiations around a possible ceasefire and the release of civilian hostages," this momentum seems to have been suspended this week. He pointed out that gold prices fell at the beginning of this week, but rebounded as the week progressed. The US yield is still at a high level, indicating that the main driving force of gold is concentrated in its hedging appeal
Gold is still the preferred market, bonds provide little protection, and stocks continue to sell, "Ole Hansen, head of commodity strategy, said in a comment on Kitco News. In the past few days, we have seen some
