Gold price (XAU/USD) holds onto a fresh weekly high, supported by the cautious market mood that is a product of the deepening Israel-Hamas conflict. The Israeli army responded to Hamas’ Saturday incursion with airstrikes on the Gaza Strip. Neutral commentary from Federal Reserve (Fed) policymakers has increased the perception that the central bank has finished raising interest rates. Fed policymakers are worried about rising Treasury yields and warned that the central bank needs to be careful with interest rates as further policy-tightening could damage financial conditions. The US Dollar has failed to capitalize on Middle East tensions and is expected to remain under pressure ahead of the Producer Price Index (PPI) data for September and Federal Open Market Committee (FOMC) minutes.

Gold price refreshed its weekly high at $1,860.00 on Tuesday amid a data-packed week and risk-aversion theme due to the Israel-Hamas conflict. The precious metal formed a wide Bullish Belthold candlestick pattern on Monday, which indicates a sharp recovery after a prolonged sell-off. Momentum oscillators have rebounded strongly after turning extremely oversold.