Gold started November on a softer note, with investors on the watch for the US Federal Reserve’s policy decision due later in the day, after concerns over the Middle East conflict boosted the safe-haven asset’s prices above $2,000 an ounce last month.
Spot gold fell 0.2% to $1,978.36 per ounce by 0351 GMT on Wednesday, while US gold futures dropped 0.4% to $1,987.00. Spot gold posted a 7.3% jump in October, with prices hitting an over five-month high of $2,009.29 last week.
The market pushed prices above $2,000, but it came back down, it tried to move up again, but it didn’t move substantially higher, signalling there is more or less fatigue in the market, said Brian Lan of Singapore dealer GoldSilver Central.
The major factor for the market is the Middle East conflict and whether there is an escalation with other parties joining the war, Lan added. Israeli airstrikes hit a densely populated refugee camp in the Gaza Strip, killing at least 50 Palestinians and a Hamas commander.
Markets now await the outcome of the Fed’s monetary policy meeting concluding later in the day, followed by the US monthly jobs report on Friday.
Gold hovers near $2,000 on ME risks
“Although no change in the interest rates is expected, the focus will be on the Fed’s assessment of the US economy and clues to the monetary policy going forward,” said Praveen Singh, associate vice president at BNP Paribas’ Sharekhan.
Meanwhile, Asia’s manufacturers faced worsening pressure in October with factory activity in China slipping back into decline, clouding recovery prospects for the region’s major exporters already squeezed by weaker global demand and higher prices.
Spot silver dropped 1% to $22.662 per ounce, platinum slipped 0.6% to $927.77, while palladium rose 0.5% to $1,120.91.
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