October brought a significant turning point for gold as rising geopolitical uncertainty coupled with the prospect of changes to US monetary policy caused spot prices in USD/oz to increase by 7.32% - biggest monthly gain since March 2023. Gold ended the month up 8.76% year to date, while also breaching the psychological US22000/OZ threshold on October 27 for the first time since March Year. October also marked the third consecutive month of losses across global and US stocks - the first since 2020 - with the SP 500® Index and MSCI ACWI Index falling 2.1% and 3%, respectively. 0% in October, despite the US posting a gross domestic product of 4.9%. product growth (GDP) in Q3 2023. Gold's rally was fueled by increased geopolitical volatility following the October 7 Hamas attack on Israel, with Israel responding by declaring war on Hamas in the Gaza Strip. Market concerns about the potential escalation of this conflict and regional spillovers across the Middle East have boosted risk sentiment and demand for defensive assets such as gold. As geopolitical uncertainty remains high in the Middle East and Ukraine, gold may continue to receive support from portfolio diversification and safe-haven purchases. The consensus that the Federal Reserve (Fed) was nearing the end of its rate hike cycle solidified in October. After pausing interest rates since the September 20 FOMC meeting, the decision to leave rates unchanged on November 1 for the second straight meeting confirmed market expectations that had boosted gold throughout October. Looking ahead, markets continue to price in a mid-term Fed rate cut 2024, which should support gold prices later in the year.
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