Highest in Four Weeks As Hopes Of A Diplomatic Resolution To Middle East Conflict Fade

Gold is 0.7% higher in the Asia-Pac session, the highest level in four weeks, as the intensifying conflict in the Middle East bolstered haven demand. Hopes for a diplomatic resolution deteriorated after a deadly explosion at Gaza hospital left hundreds dead and Arab leaders pulled out of a meeting planned with US President Joe Biden on his scheduled visit to Israel and Jordan.

• Bullion closed +0.2% at $1924.06 on Tuesday as geopolitical concerns and a softer USD offset a strong push higher in Treasury yields.
• US Treasury yields were pushed to or close to cycle highs after another batch of hot data. Retail sales were strong, with the ex-auto and gas measure rising by 0.6% m/m in September, above the 0.1% expected. The strength of domestic data was later reinforced by an upward revision to the Atlanta Fed’s GDPNow to 5.4% annualised for Q3.
• By the NY session close, US Treasury yields had lifted chunky 8-15bps, with the belly underperforming. The 5-year yield printed a high of 4.89%, its highest level since 2007
• According to MNI’s technical team, the high of $1931.58 came close to a key resistance at $1932.9 (Oct 13 high).