Gold takes a breather as investors await US economic data

Brijesh Patel Sun, October 22, 2023, 11:55 PM EDT In this article: 

By Brijesh Patel

(Reuters) -Gold prices held steady on Monday after hitting a five-month peak in the last session as investors looked forward to key U.S. economic data this week and kept a close watch on growing unrest in the Middle East.

Spot gold was flat at $1,981.14 per ounce by 0910 GMT, and U.S. gold futures eased 0.1% to $1,992.80.

“The market is basically in need of a consolidation after a strong rally in the past two weeks. It’s equally important to see what’s happening in the U.S. bond market, because we seeing a significant jump in the U.S. yields,” said Ole Hansen, head of commodity strategy at Saxo Bank. [US/]

The yield on the benchmark 10-year U.S. Treasury note rose above 5.0%, decreasing appeal of non-yielding bullion. [US/]

Gold prices hit their highest since mid-May on Friday and surged about 9% in the past two weeks as investors opted for the safety of bullion on fears that the Israel-Hamas war could escalate into a wider Middle East conflict.

“If we start to see ETF investors getting back, having been significant sellers since June, that could be the next leg-up in gold,” Hansen added.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF), rose 1.77% to 863.24 tonnes on Friday, while COMEX gold speculators switched to net long position in the week to Oct. 17. [CFTC/]

Washington warned of a significant risk to U.S. interests in the Middle East as Israel bombarded Gaza with air strikes and clashes on its border with Lebanon intensified.

Investors will also focus on the U.S. PCE price index — the Federal Reserve’s favoured inflation gauge — U.S. GDP figures for the third quarter, the European Central Bank’s rate decision and global flash PMIs for economic cues.

Elsewhere, spot silver slipped 0.4% to $23.21 an ounce, platinum fell 0.4% to $890.91 and palladium dipped 1.1% to $1,085.49.

(Reporting by Brijesh Patel and Swati Verma in Bengaluru; Editing by Shilpi Majumdar)

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