Strong Dollar and Geopolitics Weigh on Gold

Gold is struggling to attract buyers amid a strong US dollar, which has been buoyed by geopolitical tensions in the Middle East. The recent comments from influential Federal Reserve members have indicated that they do not see an immediate need for an interest rate hike after the quarter-point increase at the September meeting.

The Institute for Supply Management reported on Thursday that economic activity in the US manufacturing sector expanded for the ninth straight month in September, with raw material prices increasing for a 24th consecutive month. This has fueled inflationary concerns and limited the overnight pullback in US bond yields from multi-year highs.

Geopolitical risks remain high due to the ongoing US-Iran standoff, which continues to support the strong bid tone surrounding the safe-haven greenback. The Wall Street Journal reported that the Pentagon may soon send a third aircraft carrier strike group and 10,000 sailors and Marines to the Persian Gulf.