By Anmol Choubey
(Reuters) -Gold prices held above the $4,000 level on Thursday, as investors assessed the Israel-Hamas ceasefire deal, while broader geopolitical and economic uncertainty alongside expectations for U.S. rate cuts sustained bullish sentiment for the metal.
Spot gold was steady at $4,035.70 per ounce, as of 0832 GMT. U.S. gold futures for December delivery fell 0.4% to $4,055.20.
Bullion crossed the $4,000 per ounce level for the first time on Wednesday, hitting a record high of $4,059.05.
Silver is also latching on to gold’s rally and was up 0.7% to $49.21 per ounce, after hitting an all-time high of $49.57 on Wednesday.
“Gold’s rally is facing resistance as the Gaza diplomatic breakthrough reduces risk-off flows, while the ongoing US dollar recovery undermines bullion’s strength, leaving it vulnerable to pullbacks,” Nikos Tzabouras, Senior Market Analyst at Tradu.
“However, the bullish bias remains intact, and the path to new all-time highs is still wide open.”
U.S. President Donald Trump announced that a ceasefire and hostage deal was reached between Israel and Hamas under the first phase of his plan to end a war in Gaza that has killed more than 67,000 people and reshaped the Middle East.
The U.S. dollar index rose 0.1%, hovering near a two-month high, making dollar-priced bullion more expensive for overseas buyers. [USD/]
Geopolitical risks, including the Middle East crisis and the war in Ukraine, alongside strong central bank gold buying, ETF inflows, U.S. rate cut expectations, and economic uncertainties stemming from tariffs, have all contributed to gold’s rally.
The yellow metal has gained more than 53% year-to-date and is on track to record the largest annual gain since the 1979 oil crisis.
Meanwhile, Federal Reserve officials agreed that risks to the U.S. job market were high enough to warrant a rate cut, but remained wary amid stubborn inflation, per minutes of the September 16–17 meeting released on Wednesday.
Markets are currently pricing in a 25-basis-point cut each in October and December. [FEDWATCH]
“The ongoing US government shutdown has injected momentum into (gold’s) trade, alongside mounting fiscal concerns in Japan and France amid recent political leadership changes,” UBS said in a note.
Non-yielding gold thrives in a low-interest-rate environment and during times of economic and geopolitical uncertainties.
“If risk sentiment continues to improve, this may drag gold prices lower in the near term as investors rush back toward riskier assets,” said Lukman Otunuga, senior research analyst at FXTM.
Silver has gained over 70% so far this year, benefiting from the same factors driving gold’s rally as well as tightness in the spot market.
Elsewhere, platinum fell 0.2% to $1,660.55 and palladium rose 0.7% to $1,460.14, hitting a more than two-year high.
(Reporting by Anmol Choubey in Bengaluru; Editing by Mrigank Dhaniwala)
