Gold prices experienced a modest decrease of around $8.00 to $9.00 today. However, despite the decline, the impact was partially mitigated by the weakness of the US dollar. The dollar saw a loss of 0.62% or 65 points, pushing the dollar index down to 105.335, reaching its lowest level since October 12. The weakening dollar played a significant role in limiting the downward pressure on gold prices.
According to the KGX (Kitco Gold Index), spot gold is currently fixed at $1972.40 after a decline of $8.80. Underlying factors reveal a more nuanced situation, as the weakening dollar bolstered gold prices by $9.70, while selling pressure from traders contributed to a decline of $18.50 per ounce.
Today’s decrease in gold prices appears to be primarily influenced by technical factors, rather than a reduction in the underlying fundamental drivers that have pushed gold higher. Geopolitical tensions in the Middle East have continued to escalate, with rising concerns over the Israeli-Hamas conflict and potential retaliation against American targets by Iranian-backed militia group Hezbollah. The persistence of these tensions has led to significant international efforts to provide assistance to non-Hamas-affiliated Palestinians and ongoing attempts to rescue hostages.
Some traders may be capitalizing on last week’s price gains, leading to today’s decline in gold prices amidst the ongoing conflicts in the Middle East.
Looking ahead, traders are shifting their focus to important economic reports scheduled for release later this week. On Wednesday, the new home sales report for September will be published, followed by several major reports on Thursday. Among these reports is the highly anticipated Q3 GDP, expected to indicate a substantial growth rate of 4.7%, bolstering the previous quarter’s 2.1% increase.
In addition, the government will release jobless claims data for the period ending October 21, with a medium forecast of 207,000 claims compared to 198,000 in the previous month. Other economic indicators to be released include durable goods orders, advanced US trade balance goods, retail inventories, and wholesale inventories for September.
Closing the week, the government will unveil the latest PCE (Personal Consumption Expenditures Price Index) for September on Friday. Economists predict a 0.3% month-over-month increase in the core PCE index, indicating a rise in inflation from the previous 0.1%.
As of 5:37 PM EDT, gold futures for the most active December contract are down $10, settling at $1984.40. Throughout the day, the December contract traded as low as $1971 and reached a high of $1994.30, showcasing fluctuations in response to the ongoing geopolitical landscape.