Gold started November on a softer note on Wednesday as investors awaited U.S. Federal Reserve’s policy decision due later in the day, after concerns over the Middle East conflict boosted safe-haven bullion above $2,000 last month. Spot gold fell 0.2% to $1,978.14 per ounce by 0746 GMT, while U.S. gold futures dropped 0.4% to $1,987.10. Spot gold posted a 7.3% jump in October, with prices hitting an over five-month high of $2,009.29 last week.
Near term retracement of prices to $2,000 levels is not ruled out, after the sharp run-up due to geopolitical uncertainty with Israel-Hamas conflict, OCBC Executive Director and FX Strategist Christopher Wong said. Israeli airstrikes hit a densely populated refugee camp in the Gaza Strip, killing at least 50 Palestinians and a Hamas commander. “But looking beyond geopolitics, we could potentially be seeing an extended Fed pause – an eventual turn lower in yields should be supportive of gold prices,” Wong added. The Fed will conclude its two-day monetary policy meeting later on Wednesday.