The XAU/USD gold price rose as safe haven demand increased after tensions escalated following the Hamas attack on Israel. Accordingly, gold prices emerged from a weekly loss of about 3%, but they are still high near 2% since the beginning of the year so far. In the same performance, silver prices, the sister commodity to gold, are looking to rise above the level of $22 per ounce. In general, the price of the white metal rose by about 2% last week, but silver prices fell by about 10% so far this year.
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The positive momentum for the yellow metal came as financial markets prepared for the headwinds and fluctuations resulting from the attack launched by Hamas on Israel. At the same time, oil prices rose as the conflict threatened to inflame tensions in the Middle East, which contains about a third of global supplies. The yen and dollar – both safe haven currencies – also strengthened. Gold began to rise on Friday after approaching its lowest level since March last week, when it was affected by signals from the US Federal Reserve that it would keep monetary policy tight, in addition to the rise in US bond yields that put pressure on non-interest bearing assets.
Yesterday's gold gains came even after employment rates rose in the United States of America in September, which strengthens the argument in favor of another increase in US interest rates. During the weekend, Federal Reserve Governor Michelle Bowman said that US inflation remains very high, and added that further monetary tightening will likely be needed. Higher rates are generally considered negative for bullion.
Gold price forecast today:
- What happened yesterday is an important break in the downward trend of the gold price.
- Upward hopes will evaporate if the price of gold returns to the support levels of 1842 and 1830 dollars per ounce again.
- The price of gold will continue to move in response to developments on the ground regarding tensions in the Middle East, in addition to anticipation of the announcement of US inflation numbers and the content of the minutes of the last meeting of the US Federal Reserve.
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