• Gold price currently trades near $1,975 after retracing from the nearly $2,000 mark.
• Federal Reserve (Fed) Chair Powell and other Fed officials signal that rates would be held steady at its November meeting.
• Geopolitical tensions continue to hang over the market, which boosts the safe-haven asset like gold.
• Market players will focus on the US PMI, growth numbers, and the Core Personal Consumption Expenditures (PCE).

Gold prices (XAU/USD) trims a part of the previous week's gains and hovers around $1,975 during the Asian session on Monday. The bullish outlook of the precious metal is bolstered by the safe-haven flows due to the escalating geopolitical tensions in the Middle East. Meanwhile, the US Dollar Index (DXY), a measure of the value of USD against six other major currencies, consolidates around 106.15.

As the FOMC enters its blackout period, there is a clear signal that rates will be held steady at its November meeting. On Friday, Atlanta Federal Reserve (Fed) President Raphael Bostic stated that he doesn't think that the US central bank will cut the rate before the middle of next year. Fed Philadelphia President Patrick Harker reiterated his preference to keep interest rates unchanged. While Fed Cleveland President Loretta Mester said the US central bank is "at or near the peak of the rate hike cycle.

Additionally, Fed Chair Jerome Powell signaled a desire to pause rate hikes and watch how economic data develops in the coming months. Powell further stated that more monetary policy tightening might be appropriate if there are more indications about above-trend growth or if the labor market stops easing. Market players will focus on the US economic data this week, which might convince the central bank about the further monetary policy path. The stronger-than-expected data could lift the US Dollar (USD) higher and weigh on the USD-denominated gold.

On the other hand, rising tension in the Middle East might boost safe-haven assets like gold price. That said, fears that the Israel-Hamas confrontation would escalate into a larger Middle East battle grew on Sunday, with Washington warning of a significant risk to US interests in the region.

Later this week, gold traders will monitor the US S&P Global PMI on Tuesday, the first reading of Q3 Gross Domestic Product (GDP) growth on Thursday, and the Core Personal Consumption Expenditures (PCE) on Friday. Geopolitical tensions continue to hang over the market. Any sign of tensions easing could see precious metal markets come under pressure.

Fears that the Israel-Hamas confrontation would escalate into a larger Middle East battle grew on Sunday, with Washington warning of a significant risk to US interests in the region, per Reuters. 

Israel and Egypt worked together to send a second convoy of 14 aid trucks into Gaza. US President Joe Biden on Sunday held separate talks with the leaders of Canada, France, Britain, Germany and Italy. Additionally, French President Emmanuel Macron and Dutch Prime Minister Mark Rutte will visit Israel this week.

• AUD/USD recovers its losses ground above the 0.6300 mark in early Monday.
• Fed Chair Jerome Powell and other officials believe rates will stay on hold and may have peaked unless inflation rises.
• The latest Australian jobs data showed the labor market is easing.
• Market players will monitor the preliminary Australian S&P Global Composite PMI on Monday.

The AUD/USD pair kicks off the new week on a positive note during the early Asian session on Monday. The modest rebound of the pair is supported by a decline in the US Dollar (USD) and a correction in the US Treasury Bond yield. The pair currently trades around 0.6320, gaining 0.10% for the day.

The Federal Reserve (Fed) Chair Jerome Powell signaled a desire to pause rate hikes and watch how economic data develops in the coming months. Powell further stated that more monetary policy tightening might be appropriate if there are more indications about above-trend growth or if the labor market stops easing.

Furthermore, Atlanta Fed President Raphael Bostic said on Friday that he doesn't think that the US central bank will cut the rate before the middle of next year. Fed Philadelphia President Patrick Harker reiterated his preference to keep interest rates unchanged. While Fed Cleveland President Loretta Mester said the US central bank is "at or near the peak of the rate hike cycle. However, the data released this week might convince the central bank about the further monetary policy path.

About the data, September’s US budget deficit was $170 billion, according to the Treasury Department on Friday. The overall 2023 budget deficit was $1.695 trillion, 23% larger than the previous year and exceeding all pre-COVID deficits.

On the Aussie front, the recent Australian jobs data showed the labor market is easing. The Employment Change fell more than estimated, but the Unemployment Rate data showed a positive by falling more than expected. Markets expected the Reserve Bank of Australia (RBA) to tighten policy further. RBA Governor Michele Bullock said that if inflation persists above projections, the RBA would take appropriate policy actions.

Looking ahead, market players will keep an eye on the US S&P Global PMI on Tuesday, the first reading of Q3 Gross Domestic Product (GDP) growth on Thursday, and the Core Personal Consumption Expenditures (PCE) on Friday. On the Aussie docket, the Australian Consumer Price Index (CPI) will be released. These figures could give a clear direction to the AUD/USD pair.