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Gold
Source: Newsmaker.id
Gold prices (XAU/USD) fell to around US$4,120 per troy ounce during Tuesday’s (October 20) European trading session. The pressure on gold stems from a recovery in US Treasury yields and rising oil prices, which have reignited concerns regarding inflation.
The 10-year US Treasury yield is hovering around 5.13%, following a sharp climb on Monday. Higher yields make US bond-based assets more attractive compared to gold, which offers no yield. The market is also closely monitoring earnings reports from major US technology companies, as these could influence the future direction of yields.
Meta’s earnings report will be in focus this Wednesday, while Microsoft, Amazon, and Google are scheduled to release their third-quarter results next week. The scale of capital expenditure plans by AI-focused companies is under scrutiny; larger investments could potentially push Treasury yields higher, further diminishing the appeal of gold.
Meanwhile, oil prices have risen significantly over the past two weeks due to a geopolitical risk premium. Concerns have emerged following reports that Iran might extend a blockade to the Bab el-Mandeb Strait and the Suez Canal, while simultaneously preparing a response to potential new attacks by the US or Israel.
Newsmaker Analysis: Gold is currently facing pressure from two fronts: rebounding US Treasury yields and rising oil prices. If AI-related investments drive economic growth while simultaneously pushing yields higher, the upside potential for gold will become increasingly limited. Nevertheless, an escalation in the Middle East conflict remains a factor that could reignite demand for gold as a safe-haven asset. (asd)
Source: Newsmaker.id