Gold prices (XAU/USD) surged above the $1,980 mark during early Asian trading hours on Thursday, driven by a blend of rising geopolitical tension and encouraging economic data from the United States. Despite the boost in US Treasury bond yields, the precious metal managed to gain traction, currently trading at $1,983, marking a 0.21% increase for the day.
The surge in the US Dollar Index (DXY) to 106.55, the highest since last Friday, along with an upward trend in the 10-year US Treasury yield to 4.95%, may potentially restrict the upward momentum of the non-yielding yellow metal.
In contrast, the escalating tensions in the Middle East, particularly the recent announcement by Israel’s Prime Minister Benjamin Netanyahu regarding the preparation for a ground invasion of Gaza, have prompted investors to seek refuge in safe-haven assets, thereby boosting the demand for gold.
Market participants are keeping a close eye on the upcoming preliminary estimate of the US Q3 Gross Domestic Product (GDP) release, expected to show a 4.2% expansion. Additionally, the weekly US Jobless Claims and Durable Goods Orders, along with the US Core Personal Consumption Expenditure Index (PCE) due on Friday, will offer crucial insights for traders seeking opportunities around gold prices (XAU/USD).