Gold futures rose by $20 per ounce or 0.75%, reaching a new record high, helped by uncertainty around the US presidential election, high geopolitical tensions in the Middle East, as well as the weakening of the US currency. The results of the October ECB meeting and expectations of further easing of the Fed's monetary policy also increased demand for gold.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) fell by 0.15% to 103.67.
As for the situation in the Middle East, Hezbollah said it will escalate war with Israel after the killing of Hamas leader Yahya Sinwar.
Meanwhile, today's Chinese data - GDP, retail sales, industrial production and fixed asset investment - exceeded economists' forecasts, which is a hopeful sign for the world's second largest economy. “The national economy showed positive signs of growth in September. The confidence is building up to hit the full-year growth target of around 5%”, Sheng Laiyun, the National Bureau of Statistics deputy commissioner, said.
The outlook for the Fed's monetary policy also remains in focus. Yesterday's US retail sales data exceeded expectations and indicated a strengthening economy, but traders still forecast an interest rate cut in November. According to the CME FedWatch Tool, markets see a 91.7% probability of a 0.25% rate cut at the November meeting (compared to 93.7% yesterday) and a 71.8% probability of a 0.25% rate cut in December (compared to 85.6% yesterday). Lower interest rates reduce the opportunity cost of holding bullion.