Gold surged to $2,009.42 per ounce – the highest price in the past 23 weeks – on October 27, before falling to around $1,979 on November 1.
The rise came with Israel launching a ground offensive inside the Gaza Strip in the war with Hamas, while the current fall in demand for the safe-haven asset follows determined calls for a de-escalation in the conflict, with the UN passing a resolution calling for “humanitarian truce”.
“The UN General Assembly approved a nonbinding resolution on Friday calling for a ‘humanitarian truce’ in Gaza leading to a cessation of hostilities between Israel and Gaza’s Hamas rulers, the first UN response to the war,” business magazine Fortune reported on October 28.
The gold price also came under pressure from the strength of the US dollar, with the market expecting the Federal Reserve to maintain its high interest rates.
With such bearish sentiment, the gold-dollar pair was likely to move lower.
“The US dollar edged higher in early European trade on [October 30], retaining last week’s strength at the start of a week that includes several central bank meetings, most importantly by the Fed, as well as a slew of important economic data releases.
“The US dollar has been on the front foot of late, helped by signs of US economic strength, even after a prolonged period of interest rate hikes by the Federal Reserve,” Investing.com reported on October 30.
Most US economic indicators for October were predicted to be neutral based on data forecast readings on economic data platform Forex Factory.
The US central bank is on November 2, at 1am Cambodian time, set to release the Federal Fund Rate along with the Federal Open Market Committee (FOMC) statement, which could point to a continuation of the current bearish trend.
For a clearer outlook on the market trend, traders and investors should wait for October US jobs data – Average Hourly Earnings, Non-Farm Employment Change and Unemployment Rate – scheduled for release on Friday at 7:30pm Cambodian time.
