Posted 27th October 2023

Gold Price News: Gold Stays At Elevated Levels Amid Middle East Tensions

gold stays elevated amid middle east tensions

Gold prices remained buoyant Wednesday and Thursday at five-month highs, posting modest gains compared with prices at the start of the week.

Gold traded in a range of $1,975 to $1,992 per ounce on Thursday, compared with a low of $1,955 per ounce on Monday. The latest action saw gold reach its highest levels since April and May when prices spent several weeks trading above $2,000 an ounce.

gold price action on kinesis exchange 6 months
Gold ($/g) price – 6-month view – from Kinesis Exchange

Prices remained propped up amid ongoing tensions between Israel and Palestine, which have introduced a risk premium in the market as investors switch away over to save haven assets.

Sentiment has soured in the wider financial markets through most of October, with the main stock market indices in the US, UK, Germany, Japan and China all posting losses. Weaker stock markets are normally accompanied by capital flows into lower-risk assets such as precious metals.

On the macroeconomic side, the ECB surprised few with its decision to keep interest rates unchanged at 4.5% on Thursday. Monthly figures for US durable goods orders and the quarterly GDP growth rate both came in above expectations in what would ordinarily be a bearish signal for gold prices. However, these were eclipsed by the market’s more immediate concerns over tensions in the Middle East.

Friday is expected to see the release of monthly US Core PCE Price Index figures, while Tuesday next week will see Chinese manufacturing PMI data, a Bank of Japan interest rate decision and the Euro Area quarterly GDP growth rate flash.

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