- Gold prices gain upward support from the Middle–East conflict.
- Upbeat China data could provide support in underpinning the prices of Gold.
- US Dollar strengthens on the solid economic data.
Gold price continues to gain ground, trading higher around $1,940 per troy ounce during the Asian session on Wednesday. The rising geopolitical tensions between Israel and Hamas are likely contributing to a higher demand for Gold as a traditional safe-haven asset.
On Tuesday, conflicting reports emerged regarding an Israeli air attack in Gaza, with authorities there claiming 500 casualties at a hospital, while Israel attributed the damage to a Palestinian attack, according to Reuters.
Moreover, the yellow metal could also benefit from unexpected positive economic data from China. In the third quarter, China’s Gross Domestic Product exceeded expectations, showing a growth of 1.3% compared to the anticipated 1.0%. The annual report for the same quarter revealed a 4.9% increase, surpassing the expected 4.4%.
Additionally, China’s Retail Sales (YoY) demonstrated a rise of 5.5%, surpassing both the previous figure of 4.6% and the expected 4.9%.
The US Dollar Index (DXY) loses intraday gains after the Chinese figures, struggling to hold ground near 106.10, by the press time. However, US Treasury yields improved, with the 10-year US Treasury bond yield reaching 4.83% could support the Greenback.
The US Bureau of Economic Analysis (BEA) revealed that Retail Sales surpassed expectations of 0.3% MoM, rising to 0.7% in September. Additionally, the Retail Sales Control Group recorded a notable increase of 0.6%, compared to the previous hike of 0.2%.
Moreover, the Federal Reserve reported that Industrial Production demonstrated improvement by 0.3%, contrary to the expected stagnation at 0.0%.
Thomas Barkin, the President of the Richmond Fed, highlighted that the current policy is already viewed as restrictive. Expressing uncertainty about the upcoming FOMC monetary policy meeting in November, Barkin emphasized that the US central bank cannot depend solely on longer-term higher bond yields to implement tightening measures in monetary conditions.
Minneapolis Federal Reserve Bank President Neel Kashkari remarked on Tuesday that inflation has persisted for a more extended period than initially anticipated and remains excessively elevated. This perspective aligns with the dovish stance maintained by several other Fed officials.
Investors will likely focus on the housing data and speeches from Fed officials on Wednesday, which could offer some hints about further monetary policy paths.