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Gold Price Jumps vs. Falling Dollar as Hamas/Israel Discuss Extending Ceasefire

GOLD PRICES surged Monday morning to hit 6-month highs against the Dollar as the US currency fell, as did Western stock markets, while Israel signaled it might agree to a longer ceasefire in Gaza if Hamas agrees to release more hostages kidnapped during its 7 October terrorist attack, says Atsuko Whitehouse at BullionVault.
The gold price jumped as high as $2017 per Troy ounce, the highest since 15 May – peak of the mini-crisis in US regional banks which also saw former Swiss giant Credit Suisse swallowed by competitor UBS – after holding above the psychological level of $2000 at the close of last week.
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"In order for [spot] gold to go above its historical high of $2080" from this spring's mini-crisis in US banking "it will first have to overcome the selling" seen over the past few sessions above the $2000 level, said Bruce Ikemizu, chief director of the Japan Bullion Market Association, in a weekend note, pointing out how the yellow metal had tried and failed to break that resistance since the end of October.
Chart of US Dollar gold price at the $2000 level in November 2023. Source: BullionVault
"At the very least," says Nicky Shiels, head of metals strategy at Swiss bullion refining and finance group MKS Pamp, "the weekend's developments [over possibly extending the Israel/Hamas cease-fire] is a test whether the recent rally through $2000 was mostly hinged on" derivatives betting or chart-based 'technical' trading rather than "geopolitics or central-bank buying."
The Dollar index – a measure of the US currency's value versus its major peers – slipped 0.1% towards the 3-month low set last Tuesday, down 3.4% from the peak in early October when the Federal Reserve's "higher for longer" messaging on short-term interest rates send bond prices tumbling with gold and silver, pushing longer-term borrowing costs higher. 
Monday, in contrast, saw the yield offered by 10-year US Treasury bonds – a benchmark rate for government as well as many finance and commercial borrowing costs – only edge higher to 4.47% per annum, sharply below the 17-year high of near 5.00% registered in mid-October.
Gold prices have meanwhile risen by 11.4% from the multi-month low reached on the eve of Hamas' attack, with the price of silver – primarily an industrial metal – jumping 2.0% on Monday to hit $24.82 per ounce, the highest since 30 August with 20.2% rise from early October.
The strength of silver pushed the Gold/Silver Ratio – which tracks the two formerly monetary metals' relative prices – down further to just above 81, the lowest value for gold in terms of silver in 2 months.
Platinum, which finds two-thirds of its demand from industrial uses led by auto-catalysts, rose less steeply, up 0.2% to $937 per ounce and extending platinum's discount to gold prices back towards the record $1098 per ounce hit at the start of November.
Oil prices meanwhile fell on Monday, with Brent crude futures slipping toward $80 a barrel after rising last week for the first time in five.
A meeting of the Opec+ cartel of oil producer nations later this week is expected to curb supplies into 2024, although the meeting was delayed to iron out differences on production targets for African members.
Gold priced in Euros meantime rose 0.5% to €1838 per Troy ounce on Monday while the UK gold price in Pounds per ounce edged higher 0.4% to around £1593.
European stocks were lower as the region's Stoxx 600 index edged 0.2% down from Friday's near 10-week high.
US stock futures were also down after the S&P500 and tech-heavy Nasdaq 100 indices both made 4 weeks of gains. Despite the ongoing geopolitical upheaval in the Middle East, those gains have seen the VIX index of US equity option contracts' volatility drop sharply, with the 'fear index' giving its lowest reading since January 2020, just before the Covid-19 shock unfolded.
Terrorist and political group Hamas said Sunday it's seeking to extend the ongoing truce and hostage agreement with Israel beyond the initial 4-day period agreed.
"For every day, another 10" hostages need to be released, responded Israel's Prime Minister Benjamin Netanyahu after a call with US President Joe Biden on Sunday evening, warning that Israel will then resume its offensive "with all of our might".

Atsuko Whitehouse is the Head of the Japanese Market at BullionVault and the Editor of Japanese GoldNews.

See all articles by Atsuko Whitehouse here.

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