22 February 2024: Gold continues to advance today after the sharp losses it suffered last week, which pushed it to the lowest levels in about two months, to regain today the level of $2030 per ounce for spot contracts and the level of 2042 for COMEX futures.

Gold’s gains today come with the lackluster performance of bond yields, which reversed from their highest levels in two months, while markets are still closely monitoring developments in the Middle East with fears of its expansion that cannot be contained in light of recent developments.

After the yield on ten-year Treasury bonds reached the level of 4.332% last week, it declined yesterday and reached the level of 4.244%. While the correction in two-year bond yields was more evident, as they reached the level of 4.574% yesterday after reaching the level of 4.721% last week.

While this week is not filled with many important economic data from the United States, which may give an opportunity for gold to maintain its gains in the absence of data that fuels fears about the continuation of high inflation, as we have witnessed over the past weeks.

However, today we await the minutes of the Federal Open Market Committee (FOMC) meeting held last month in order to search for any hidden indication about the next steps of monetary policy makers and their vision of the path of inflation.

Gold also benefits from the rise in hope about the possibility of the Federal Reserve cutting interest rates next May, with the probability of a cut rising by 25 basis points from 28% yesterday to more than 34% today, according to the CME FedWatch Tool.

As for the geopolitical aspect of the Middle East, concerns prevail about the possibility of launching ground operations in the city of Rafah in the coming weeks. Therefore, this expansion of ground operations into the city full of refugees may threaten to ignite the conflict in a way that may not be contained by introducing more actors in the region more deeply involved in the conflict.