Daily Digest Market Movers: Gold price continues to draw support from a combination of factors

On Thursday, the European Central Bank decided to lower interest rates for the third time this year – marking the first back-to-back rate cut in 13 years – and eyes more cuts in the wake of the worsening economic outlook. 

The Federal Reserve is also anticipated to lower borrowing costs further after a jumbo rate reduction in September, while weak inflation data from the UK solidified bets for a more aggressive easing by the Bank of England. 

Meanwhile, the tight race between Donald Trump and Kamala Harris adds a layer of uncertainty, which, along with the risk of a further escalation of conflicts in the Middle East, lift the Gold price to a fresh all-time high. 

The Israeli military confirmed that Hamas leader Yahya Sinwar had been killed on Wednesday after a “year-long pursuit”, while the Iran-backed Hezbollah announced a new and escalating phase in its war with Israel.

Data published by the US Census Bureau on Thursday showed that Retail Sales increased by 0.4% in September, surpassing market expectations for a 0.3% monthly gain and a 0.1% rise recorded in the previous month.

Separately, the US Labor Department reported that Initial Jobless Claims, after hitting the highest level in more than a year,  fell to 241K in the week that ended October 12 against the anticipated reading of 260 K.

Furthermore, the Philadelphia Federal Reserve's manufacturing sector survey revealed that the business conditions index rose from 1.7 to 10.3 in October, beating consensus estimates by a wide margin.

The data suggested that the economy remains on solid footing and reaffirmed bets for a less aggressive Fed policy easing, lifting the US bond yields and the US Dollar, albeit doing little to dent demand for the XAU/USD. 

Traders now look to the US housing market data – Building Permits and Housing Starts – and Fed Governor Christopher Waller's scheduled speech to grab short-term opportunities on the last day of the week.