Gold price rises as Israeli army determines to demolish Hamas in Gaza, US Q3 GDP eyed

• Gold price extends gains as Middle East tensions escalate.
• The demand for US Dollar and bond yields strengthens ahead of the Q3 GDP data.
• Market sentiment remains downbeat amid geopolitical tensions and global slowdown fears.

Gold price (XAU/USD) prints a fresh three-day high as confirmation from Israeli Prime Minister Benjamin Netanyahu that the Israeli army is prepared for the ground assault in Gaza, increases the appeal of safe-haven assets. 

The demand for bullions remains upbeat despite a surge in the US Dollar and long-term US bond yields following strong US business activity in October. Meanwhile, investors await the US Q3 Gross Domestic Product (GDP) and core Personal Consumption Expenditure (PCE) inflation data for September, which carries the potential to impact the decision-making of the Federal Reserve (Fed) in its monetary policy meeting scheduled for November 1. 

Daily Digest Market Movers: Gold price refreshes three-day high amid Middle East tensions

• Gold price refreshes a three-day high near $1,990.00 on safe-haven demand after a statement from Israeli Prime Minister Benjamin Netanyahu escalated fears of a ground assault in Gaza.
• The tensions in the Middle East have escalated as Benjamin Netanyahu said that the army is preparing for the ground attack but won’t share the exact timing or strategy.
• Netanyahu said that the military’s goal is to save their nation from Hamas. He clarified that the ground assault to destroy Palestine's military troops will start soon.
• The demand for bullions firms again despite a sharp recovery in long-term US bond yields and the US Dollar.
• The US Dollar Index (DXY) refreshed a two-week high above 106.80 after a private sector survey from S&P Global showed that business activities in the US economy remained upbeat in October despite high interest rates by the Federal Reserve.
• The US business activity survey showed that the private sector Manufacturing PMI tested the 50.0 threshold for the first time in six months. An uptick in the US factory activity at the start of the last quarter of 2023 is good news for the economy. 
• S&P Global reported that business sentiment has improved on hopes that the Fed is done with hiking interest rates amid easing price pressures.
• The appeal of the US Dollar improves as investors pare investments in risk-sensitive assets due to escalated global slowdown fears.
• The 10-year US Treasury yields rose to 4.96% ahead of the Q3 US GDP data, which will be published at 12:30 GMT. The Bureau of Economic Analysis (BEA) is expected to show an expansion of the US economy at an annualized rate of 4.2% after the 2.1% expansion recorded in the second quarter's GDP report. 
• An upbeat GDP report could result in a notable increase in bond yields and the US Dollar as it elevates the odds of one more interest rate increase from the Fed in the remainder of 2023.
• Apart from the US GDP data, investors will watch Durable Goods Orders for September. As per the estimates, the demand for core goods is expected to have risen by 1.5% against a nominal increase of 0.1% in August. An upbeat core goods demand report would elevate consumer inflation expectations and hopes of further policy tightening by the Fed.
• Considering recent statements from Fed policymakers, a steady interest rate decision is widely anticipated from the Fed in its monetary policy meeting on November 1. A majority of Fed policymakers along with Chair Jerome Powell commented that at this time high US bond yields are equivalent to one interest rate hike of 25 basis points (bps).
• As per the CME Fedwatch tool, traders see the Fed keeping interest rates unchanged at 5.25-5.50% almost certain. The odds of one more interest rate increase in any of the two remaining monetary policy meetings in 2023 have increased to 29%.

Technical Analysis: Gold price jumps close to $1,990

Gold price climbed close to $1,990 on Wednesday after concluding the corrective move, which dragged it to near $1,953. The precious metal resumes its upside journey and is aiming to surpass the psychological resistance at $2,000. The near-term trend turns bullish as the 20 and 50-day Exponential Moving Averages (EMAs) have delivered a bull cross. Momentum oscillators trade in a bullish range, which indicates that the upside momentum is intact.