Gold prices experienced a noticeable adjustment as the dollar strengthened and market attention shifted to upcoming U.S. economic data to predict the Federal Reserve's policy trajectory. Spot gold fell 0.35% to $2,653.98 per ounce, while U.S. gold futures dropped 0.7% to $2,670.30 per ounce. The dollar index maintained its largest weekly gain, directly influencing gold prices.
Investors are increasingly concerned about Middle East tensions, particularly between Iran and Israel, which has heightened geopolitical risks and driven safe-haven demand. However, the strong dollar has exerted downward pressure on gold.
Global trading volume remains low due to market closures in China and India, amplifying market volatility. Investors are eagerly awaiting key U.S. economic data, including the ADP employment report, ISM Services Index, and Non-Farm Payrolls (NFP), to gauge the Federal Reserve's future interest rate decisions.
Market anticipation remains divided over the Federal Reserve's potential rate cuts in November. The latest data suggests a 65% probability for a 25 basis points cut, while a 50 basis points cut has a 35% chance. Analysts warn that higher-than-expected ISM and NFP data could weaken bets on aggressive rate cuts, putting additional pressure on gold prices.
Despite the dollar's strength, geopolitical risks continue to underpin gold. Heightened tensions due to Iran's attacks on Israel and subsequent retaliatory statements by Israeli Prime Minister Netanyahu have fueled short-term safe-haven demand.
Physical gold demand has shown signs of decline due to high prices, driving some retail investors to liquidate holdings, further limiting gold's upward momentum.
Silver fell 0.8% to $31.17 per ounce, while platinum remained stable at $986.43 per ounce, and palladium rose 0.5% to $999.94 per ounce.
The gold market is currently experiencing intense competition between bulls and bears. The strong dollar and decreasing physical demand exert continuous pressure on gold prices, while geopolitical risks and upcoming U.S. economic data inject cautious optimism into the market.
In the short term, gold is likely to remain volatile, but further supportive data for a slower Federal Reserve rate cut could continue to suppress gold prices. Investors should closely monitor these key data points and adjust their strategies accordingly.
