Gold prices held steady near the key $2,000 level on Monday, buoyed by safe-haven demand from an escalating Middle East conflict, as investors awaited the outcome from the US Federal Reserve's policy meeting this week. Spot gold was steady at $2,003.17 per ounce by 0245 GMT. US gold futures climbed 0.7% to $2,013.00. Israeli air strikes hit areas near Gaza City's Shifa and Al-Quds hospitals early on Monday, and Palestinian militants clashed with Israeli forces in a border area east of the city of Khan Younis, in the enclave's south, Palestinian media reported.
Gold prices reached $2,009.29 per ounce on Friday, surpassing the significant psychological level of $2,000 for the first time since mid-May. This surge was driven by investors flocking to safe-haven gold amid concerns about the global economic repercussions of the Israel-Hamas conflict.
Investors are eagerly awaiting the US central bank's policy decision on Wednesday. Although the Federal Reserve is anticipated to maintain unchanged interest rates, the spotlight will be on Chair Jerome Powell's remarks.
City Index senior analyst Matt Simpson noted, "The string of robust economic data will likely compel the Fed to maintain a cautious stance, even amid concerns about the Middle East conflict."
He added, "This is likely to provide support for gold prices, which seem firmly established above $2,000 as the week begins."
The Commerce Department's report on Friday indicated a strong increase in US consumer spending for September, while monthly inflation remained elevated.
Economists surveyed by Reuters, totaling over 200, predict persistent high inflation as a significant global economic concern next year. Three-quarters of them expressed the main worry that inflation might surpass their initial forecasts, implying the likelihood of interest rates staying elevated for an extended period.
Although gold is traditionally viewed as a hedge against inflation, the appeal of non-yielding bullion is dampened by higher interest rates.
As for precious metals, spot silver remained at $23.15, platinum experienced a 0.3% decline to $901.35, and palladium saw a 0.2% increase at $1,124.48.
