Gold Retreats as Dollar Firms ahead of Key US Economic Data

Gold bullion displayed in a store in the German city of Pforzheim (dpa)
Gold bullion displayed in a store in the German city of Pforzheim (dpa)
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Gold Retreats as Dollar Firms ahead of Key US Economic Data

Gold bullion displayed in a store in the German city of Pforzheim (dpa)
Gold bullion displayed in a store in the German city of Pforzheim (dpa)

Gold extended declines on Thursday, pressured by a stronger dollar, while investors were cautious ahead of key US economic data that might provide clues about the size of the Federal Reserve's interest rate cuts expected later this year.

Spot gold fell 0.5% to $2,645.39 per ounce by 0812 GMT.

US gold futures edged 0.2% lower to $2,665.60.

The dollar hit a one-month high, making greenback-priced bullion more expensive for other currency holders.

Gold is consolidating at this point but prices will likely retest an all-time high of $2,685 as charts show persistent strong upward trends, said Brian Lan, managing director at Singapore-based dealer GoldSilver Central, according to Reuters.

Investors are watching out for the ISM services data and the initial jobless claims, due later in the day, along with the US non-farm payroll data expected on Friday.

Data on Wednesday showed US private payrolls increased more than expected in September - further evidence that labour market conditions were not deteriorating.

Expectations of another 50-basis-point rate cut at the Fed's November meeting have dipped, with markets currently pricing in a 36% chance, down from 49% last week, according to CME's FedWatch Tool.

Gold tends to thrive in a low interest rate environment and political turmoil.

"Middle East tensions and US elections will continue supporting bullion in the longer term... In the short-term, some funds might shift to oil from gold since oil is doing better," Lan said.

Israel bombed central Beirut, killing at least six, after its forces suffered the deadliest day on the Lebanese front in a year of clashes against Iran-backed armed group Hezbollah.

Perth Mint's gold product sales touched a 10-month peak in September, while silver sales hit a seven-month high.

Spot silver fell 1.2% to $31.49, platinum shed about 1% to $992.10 and palladium lost 2.2% to $992.93.



Lebanon’s Struggling Economy Slides Toward Full Recession

The Jousieh crossing between Lebanon and Syria following an Israeli strike on October 25. (AFP)
The Jousieh crossing between Lebanon and Syria following an Israeli strike on October 25. (AFP)
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Lebanon’s Struggling Economy Slides Toward Full Recession

The Jousieh crossing between Lebanon and Syria following an Israeli strike on October 25. (AFP)
The Jousieh crossing between Lebanon and Syria following an Israeli strike on October 25. (AFP)

The ongoing Israeli war on Lebanon has led to significant economic losses estimated between $10 billion and $20 billion.

This range reflects the difficulty in accurately assessing the damage amid Israel’s ongoing military operations, including airstrikes and ground attacks.

The destruction of homes, infrastructure, and farmland has contributed to a state of uncertainty, along with an unprecedented wave of displacement affecting many families.

Experts agree that reliable economic data is hard to obtain while the conflict continues.

Reports from the Ministry of Health and international organizations said nearly 3,000 people have been killed and around 15,000 injured, mostly civilians.

Additionally, about 1.4 million people have been displaced from their homes, representing roughly a quarter of Lebanon’s population.

Growing economic crisis ahead

The war came at a time when Lebanon’s economy was already struggling after five years of crisis.

According to Mohammad Choucair, head of the Economic Bodies Association, the situation is worsening rapidly, threatening serious economic and social consequences.

Current estimates suggest that direct losses from the conflict could reach between $10 billion and $12 billion, impacting various sectors.

As the war continues, key sectors like tourism, agriculture, and trade are experiencing a sharp decline in business activity.

Many small and medium-sized enterprises are being forced to close or suspend operations due to direct damage from attacks, reduced consumer demand, and disruptions in trade and supply chains caused by the influx of displaced people.

International financial institutions are warning that the ongoing Israeli attacks could continue for several more months, possibly lasting until mid-2025.

The Institute of International Finance (IIF) forecasts a 7% contraction in Lebanon’s GDP by the end of this year, followed by a 10% decline next year.

This would bring the total economic decline to nearly 60% from the peak GDP of around $53 billion recorded at the end of 2018.