BENGALURU: Gold climbed back towards last week’s five-month peak on Thursday, undeterred by a stronger US dollar and bond yields, as investors looked to the safe-haven asset amid the Middle East conflict. Spot gold rose 0.4% to $1,986.69 per ounce by 1131 GMT, trading just shy of its highest level since May 16 hit on Friday.

US gold futures rose 0.1% to $1,996.80.

The dollar and benchmark US 10-year Treasury yields were boosted after robust data on Wednesday which boosted expectations of prolonged high rates heading into 2024.

The market now awaits the US GDP numbers due later in the day, and the PCE price index on Friday for indications on what to expect from the Federal Reserve’s policy meeting next week.

The US economy likely grew in the third quarter at its fastest pace of any quarter in nearly two years. The European Central Bank is expected to announce its policy decision at 1215 GMT.

“I don’t think the data will have that much of an effect on the market, especially for precious metals prices because the war is still taking centre stage,” said Brian Lan, managing director at Singapore dealer GoldSilver Central.

Analysts are keeping an eye on the Israel-Hamas conflict to assess the war’s potential repercussions on the Middle East and beyond, as Israeli ground forces operated within the northern Gaza Strip on Thursday.

Gold, a safe asset used to hedge against political and economic ambiguity, loses some of its appeal if interest rates are raised, as it is a non-yielding entity.

“The Fed clearly sees higher interest rates as a route to reining in inflation,” said Nikos Kavalis, managing director at Metals Focus. Spot silver gained 0.4% to $22.97 an ounce, platinum firmed 0.4% to $906.38 and palladium was down 0.7% to $1,117.40.