Gold prices have descended from over two-month highs as markets anticipate Federal Reserve Chair Jerome Powell’s imminent speech and react to a rebound in the dollar. Spot gold dipped 0.1% to $1,946.51 an ounce, while gold futures fell 0.5% at $1,958.35 an ounce on Thursday.

The recent surge in gold prices was due to the intensifying conflict between Israel and Hamas, which bolstered gold’s attractiveness as a safe haven asset. However, the rise was tempered by soaring U.S Treasury yields and the dollar’s recovery, both driven by expectations of higher interest rates.

Markets are pricing in higher interest rates, indicated by surging Treasury yields and an unexpected surge in U.S inflation data. The financial community anticipates Powell’s forthcoming speech to affirm his commitment to maintaining elevated interest rates for an extended period.

The cancellation of a diplomatic summit involving U.S., Egyptian, and Palestinian leaders has also stirred the markets, keeping gold near its recent peak as investors continue to monitor the Middle East conflict.

Meanwhile, in other commodities, copper prices declined amid fears of a property market crash in China, despite encouraging Chinese GDP data. Copper futures slipped 0.3% to $3.5713 a pound. This decline was influenced by Country Garden, a significant Chinese developer, defaulting on a crucial offshore bond repayment deadline, indicating likely widespread defaults on its foreign debt.