Gold prices dip amid easing Middle East tensions; dollar strengthens

Gold prices experienced a modest decline today, reaching $1,956.09 initially, as the dollar strengthened and safe-haven demand tempered. The market has also reacted to Israel’s cautious approach in its conflict against Hamas, following the recent terror attacks by the Islamist group. However, gold quickly rebounded, currently trading at $1,972.74.

The easing of safe-haven buying can be attributed to Israel’s delay in invading the Gaza Strip, despite earlier threats. Hamas, responsible for the attacks on Israeli civilians and foreign nationals on October 7, has been slowly releasing hostages, defusing tensions. While Israel’s defense forces are engaged with Hezbollah militants along the border with Lebanon, the conflict has not spread to other Middle Eastern nations, providing some relief to global markets.

Dollar buying also influenced gold prices today. The dollar index surged back above 106, erasing losses from the previous day. This increase has made gold more expensive for international buyers, leading to a slight dip in demand.

Treasury yields have also been mixed on the day, with the U.S. two-year note recently offering a return of 5.101%, up by 4.3 basis points. Meanwhile, the yield on the 10-year note increased by 0.9 basis points, reaching 4.84%.