2023-10-16 20:25:41
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Investing.com – Gold prices fell on Monday, reversing course after increased demand for safe havens led to a series of strong gains in the yellow metal, with the focus remaining on any possible extension of the ongoing war in the Palestinian territories.
The yellow metal witnessed a series of gains after it jumped by more than 5% in the previous week, as the outbreak of war between the occupation army and Hamas prompted investors to search for safe haven assets.
Markets are now watching whether the conflict between Hamas and Hamas will extend to the Middle East, while many news sources are reporting that the occupation army is preparing for a ground attack in the Gaza Strip.
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Gold prices today
It fell 0.7% to $1,920.07 an ounce, while those expiring in December fell 0.4% to $1,933.15 an ounce by 00:15 ET (04:15 GMT).
High interest rate expectations in the US limit gold’s appeal.
To read the analysis and forecasts for gold this week:
Fed and gold
Last week’s stronger-than-expected US inflation data signaled a continued hawkish stance from the Federal Reserve, which is likely to keep interest rates high for longer.
This idea has weighed on gold prices over the past year, and with US interest rates remaining stubbornly high, it is likely to limit any significant rise in the yellow metal.
While gold saw some strong gains due to safe haven demand, the dollar remained largely the safe haven of choice. Flows were seen approaching their highest levels in 10 months last week.
Higher interest rates do not bode well for gold, as it leads to a higher opportunity cost of investing in the yellow metal. This idea has limited any significant gains in the yellow metal, even as worsening global economic conditions led to increased safe-haven demand.
Copper rebounds with focus on China’s GDP
Among industrial metals, copper prices rose sharply on Monday after approaching a five-month low the previous week.
It rose 0.5% to 3.5907 per pound.
The focus this week is squarely on key economic readings from China, a major copper importer, especially the third quarter reading.
The reading is expected to show that China’s economic growth weakened further in the previous quarter as business activity showed few signs of improvement despite some stimulus measures.
Such a trend bodes poorly for Chinese copper demand, and could lead to further weakness in the red metal in the coming weeks. Concerns about China have been a major dampening factor on copper prices over the past year.
The People’s Bank of China is also expected to make a decision this week, although a change seems unlikely.
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