On October 23, spot gold edged down 0.23%, currently traded in 1975.$35 / oz, recovery from decline。

On Friday, gold prices closed in 1980.$24 / oz。Spot gold opened sharply lower today at 1964.81 U.S. dollars an ounce, followed by a lower shock, hitting an intraday low of 1963.$10 / oz。

U.S. bond liquidity in doubt, gold price rise blocked

On the news, on October 20, local time, according to data disclosed by the U.S. Treasury Department, the U.S. government budget deficit widened to 1 in 2023..$7 trillion, up $320 billion from 2022, up 23% year-on-year。

The huge budget deficit has forced the U.S. Treasury Department to issue debt in a big way, with data showing that in the past month alone, the U.S. Treasury has issued up to 1.5 trillion, which is a huge debt tsunami。A more serious problem is that the proportion of short-term Treasuries newly issued by the U.S. Treasury exceeds 20%, and the rising ratio of short-term Treasuries represents a possible liquidity problem for U.S. debt.。

In general, there are two possibilities for a decline in liquidity in U.S. debt。First, when economic uncertainty or market turmoil occurs, investors may turn to more secure safe-haven assets, such as gold, which may push up the price of gold;。

In addition, the yield on U.S. Treasuries, known as the "safest asset in the world," has recently experienced a wave of volatility.。Due to continued strong retail sales and unemployment data, comments from Fed officials and escalating conflicts in the Middle East, the 10-year Treasury rate fluctuated in a range of nearly 40 basis points last week, reducing the attractiveness of U.S. debt as a safe-haven asset.。

Mohamed El-Erian, Allianz Group Chief Economic Adviser and Bloomberg Opinion Columnist, believes that part of the volatility is due to the Fed's difficulty in communicating a clear vision of the direction of long-term interest rate policy.。He continued: "We will continue to be in this extremely uncertain situation because there is currently no clear vision of where the economy will go in the future.。The Fed needs to shift from a policy orientation that relies too much on current data to a reliance on data with a more forward-looking component。"

For now, geo-events have raised the market's appetite for gold, but gold prices are still limited by expectations of a Fed rate hike, and the rebound remains limited。

Direct ground fighting begins, Palestinian-Israeli conflict ignites risk aversion

In addition, according to the latest media reports on October 23, the Palestinian Hamas organization has claimed to have repelled a brief Israeli ground offensive, which means that the two sides have at least had direct ground fighting.。

For its part, Hamas, which controls the armed Al-Qassam Brigades, announced that its fighters had destroyed two Israeli army bulldozers and a tank during a "limited" offensive by the Israel Defense Forces (IDF) in the Gaza Strip.。However, the IDF did not confirm this claim by Hamas, saying only that "in the area of Kissufim, west of the security fence in the Gaza Strip, IDF soldiers were shot at."。"

On October 21, the IDF had said it was continuing preparations for a ground military operation in the Gaza Strip, adding that the Israeli army's plan to expand fighting had been approved by the Israeli emergency government in recent days, but that it would only begin operations if conditions were right.。

According to official Israeli figures, Hamas has fired more than 7,400 rockets at Israel since the outbreak of a new round of military conflict between the Palestinians and Israelis on 7 July, of which more than 1,100 have been intercepted by Israel's Iron Dome defense system.。According to data released by the Israeli Ministry of Health on October 22, the current Palestinian-Israeli conflict has resulted in more than 1,400 Israeli deaths and 5,431 injured people being sent to hospital.。Palestinian health authorities in the Gaza Strip said in a statement on 22 October that 4,651 people had been killed and at least 1.40,000 injured.。

For the future trend of gold prices, Bank of America chief economist and head of global economic research Michael Gapen said that although the strong economic data in September "maintains the possibility of another rate hike," but, due to weak inflation data, auto workers strike, tightening financial conditions, possible government shutdown and energy prices soared and other risks, there is already a considerable possibility that the Fed has completed the rate hike。

Michael Gapen also said that if the rest of the year, the Fed has no further move to raise interest rates, superimposed on the geopolitical conflict situation suspended and the environment of hope, gold is expected to remain in a favorable position。