Surges With Geopolitical Risk Despite Higher Yields & USD

Gold is little changed in the Asia-Pac session, sitting close to an eleven-week high, after closing +1.3% at $1947.55 on Wednesday. Haven demand driven by geopolitical risk dominated a further climb for US Treasury yields and renewed USD strength.

• Indeed, higher government bond yields, in the face of rising geopolitical uncertainty, appear to have driven flows into alternative portfolio hedges like gold, which has rebounded more than 8% off the October lows.
• President Joe Biden wrapped up a 7.5-hour trip to Tel Aviv to signal full US backing for Israel but fell short of appeasing Arab leaders, who sided with Hamas-controlled Gaza authorities in blaming Israel for a blast at a hospital that allegedly killed hundreds.
• According to MNI’s technicals team, bullion cleared key resistance at $1953.0 (Sep 1 high) opening up $1965.5 (61.8% retrace of May 4 – Oct 6 bear leg). Indeed, Wednesday’s high of $1962.64 came close to this level before it was helped lower by headlines that Gaza humanitarian aid was being allowed to pass from Egypt.