Gold prices steady amid Fed uncertainty, Europe recession fears
Investing.com-- Gold prices moved little on Wednesday, retaining most recent gains as fears of a recession in the euro zone, following a string of weak economic readings, kept safe haven demand supported.
Any major gains in gold were largely stymied by persistent fears of higher U.S. interest rates, especially as data released on Tuesday showed that local business activity improved in October. The dollar firmed in overnight trade, while Treasury yields steadied from recent losses.
Safe haven demand for the yellow metal receded this week amid some signs of deescalation in the Israel-Hamas conflict, as Israel postponed a planned ground assault on Gaza.
But this was somewhat offset by weak purchasing managers index data from the euro zone, which raised concerns over a potential recession in the region. Germany, Europe’s largest economy, had entered a recession earlier this year.
Gold remained within sight of the $2,000 an ounce level, although whether it would reach that level in the near-term remained in doubt, especially with several more U.S. economic cues due this week.
Spot gold rose 0.1% to $1,972.51 an ounce, while gold futures expiring in December fell 0.2% to $1,983.15 an ounce by 01:10 ET (05:10 GMT).
Markets were now largely awaiting more economic cues from the U.S. this week, chiefly third-quarter gross domestic product (GDP) data due on Thursday. Any more signs of resilience in the U.S. economy gives the Fed more headroom to keep interest rates higher for longer, while also diminishing the safe haven appeal of gold.
The GDP reading will be followed by PCE inflation data- the Fed’s preferred inflation gauge on Friday. U.S. inflation has increased in recent months, giving the Fed more impetus to remain
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