Gold prices surged to around $1,940 per troy ounce during the Asian session, driven by escalating geopolitical tensions in the Middle East, specifically between Israel and Hamas. As traditional safe-haven assets, gold tends to attract increased demand during uncertain times. Conflicting reports emerged regarding an Israeli air attack in Gaza, further fueling concerns, with Israel attributing the damage to a Palestinian attack. This heightened tension has contributed to the upward trajectory of gold prices.
In addition to the Middle-East conflict, positive economic data from China has provided further support to gold prices. China's Gross Domestic Product exceeded expectations, growing by 1.3% in the third quarter, surpassing the anticipated 1.0%. Moreover, China's Retail Sales (YoY) showed a significant rise of 5.5%, exceeding both previous figures and expectations. This economic strength from China has bolstered gold's position in the market.
While gold enjoys an upswing, the US Dollar Index (DXY) experienced fluctuations. It initially strengthened but later faced challenges, hovering around 106.10. On the other hand, US Treasury yields improved, with the 10-year US Treasury bond yield reaching 4.83%, potentially supporting the Greenback. These mixed signals in the US Dollar market have added complexity to the overall financial landscape.
Several statements from Federal Reserve officials have stirred concerns within the financial markets. Thomas Barkin, President of the Richmond Fed, expressed uncertainty about the upcoming FOMC monetary policy meeting, emphasizing the need for a balanced approach to tightening measures. Minneapolis Federal Reserve Bank President Neel Kashkari highlighted the persistence of inflation, aligning with the dovish stance maintained by other Fed officials. These comments have left investors with lingering uncertainties about the central bank's future actions.
Forex and crypto traders are keeping a close watch on the market as they anticipate forthcoming housing data and speeches from Federal Reserve officials. These events could offer insights into the future direction of monetary policy. In a market influenced by geopolitical tensions, economic data, and central bank concerns, staying informed about the latest developments is essential for traders seeking to make well-informed decisions in the Forex market.