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Gold futures have declined since the opening of Thursday’s North American trading session due to the rise in the US dollar and renewed geopolitical concerns about the possibility of the war in Gaza expanding to other areas within the Middle East.
The US dollar achieved limited gains due to Israeli Prime Minister Benjamin Netanyahu’s public rejection of a proposed hostage exchange deal that would have eased the hot regional tensions in the Middle East.
The US Dollar Index rose to 104.25 points compared to the last daily close, which recorded 104.06 points. The index fell to its lowest level on the current trading day at 103.96 points, compared to the lowest level in the same period at 10.4.34 points.
Geopolitical Tensions in the Middle East
Israeli Prime Minister Benjamin Netanyahu announced his rejection of the conditions set by Hamas for the release of the Israeli hostages it is holding in Gaza. He also pledged to continue the military attack against Gaza until his country achieves “absolute victory.”
Gold prices edged lower on Thursday, hurt by a stronger dollar and elevated bond yields as hopes for an early interest rate cut from the US Federal Reserve diminished. Spot gold fell 0.13% to $2,031.58 per ounce, while US gold futures settled 0.2% lower at $2,047.9 per ounce. The dollar index gained 0.1%, making bullion more expensive for other currency holders.
Fed Speaks
Several Fed speakers on Wednesday gave a range of reasons for feeling little urgency to start easing policy in the United States soon or to move quickly once they do. Traders now see about 61% probability of an interest rate cut from the Fed in May, which decreases the opportunity cost of holding non-yielding bullion.
Other important metals
Spot palladium prices fell below those of sister metal platinum for the first time since April 2018, as growing demand concerns and bets on stable supply weighed on the metal.
It is worth mentioning that carmakers may not switch metals in autocatalysts in the near future due to longer production cycles.
Palladium may trade at a sustained discount to platinum. Meanwhile, silver rose 1.6% to $22.55 per ounce and platinum increased 0.6%.
