Gold prices steady amid geopolitical tensions and market volatility ahead of Powell’s speech

Gold prices have made a robust recovery in the wake of mounting tensions in the Middle East and anticipation of Federal Reserve Chair Jerome Powell’s speech later today. Spot gold is currently trading at $1,949.71, marking a 0.1% gain after briefly plummeting to $1,938.42 due to a surge in Treasury Yields.

The recent surge in gold prices has been primarily triggered by the escalating conflict between Israel and Hamas, which has underscored gold’s role as a safe-haven asset. However, this rise has been counterbalanced by the simultaneous surge in U.S. Treasury yields and the resurgence of the dollar, both of which are driven by expectations of rising interest rates.

Market sentiment is clearly influenced by expectations of higher interest rates, evident in the surging Treasury yields and an unexpected increase in U.S. inflation data. The financial community is eagerly awaiting Powell’s imminent speech, with the hope that he will reaffirm his commitment to maintaining elevated interest rates over an extended period.

In addition to these factors, the abrupt cancellation of a diplomatic summit that was set to involve U.S., Egyptian, and Palestinian leaders has added to the market’s unease. As a result, gold remains close to its recent peak as investors keep a watchful eye on the developments in the Middle East conflict.

The economic calendar for today includes the release of the latest U.S. jobless claims data at 13:30 GMT. Furthermore, various Federal Reserve officials, including Jerome Powell, are scheduled to make remarks, which could contribute to the ongoing market volatility.