The European Central Bank voted to maintain interest rates flat at the October 26 meeting, at 4.50%, the highest since 2001, following a 0.25% interest rate hike in September. 

Gold prices rose in European trade on track for a second straight daily profit, hitting five-month highs and approaching $2000 on haven demand as geopolitical tensions mount in the Middle East.

Such considerations outweighed the stronger dollar, ahead of important US GDP growth data, which could provide fresh pricing for the chances of another interest rate hike this year. 

Gold Prices Today

Gold prices rose over 0.5% to $1,990 an ounce, with a session-low at $1,975, after rising 0.5% yesterday, resuming gains and approaching a five-month high at $1,997. 

Geopolitical Tensions 

Global powers in the Security Council failed to guarantee a lifeline of humanitarian aid to the Gaza strip as western and eastern powers assume opposite positions.

The Israeli army continues to pound the Gaza strip, while executing a small ground raid in northern Gaza last night. 

The Dollar

The dollar index rose 0.3% on Thursday, on track for the third profit in a row, hitting a three-week high at 106.88 against a basket of major rivals.

Such gains came following strong US data, which indicated continued growth in the US economy despite higher US rates.

Recent data showed US new home sales surged to 19-month high in September.

US Rates

Following such data, odds for a 0.25% Fed interest rates hike at the November meeting remained flat at 2%.

Odds for such a hike at the Fed December meeting rose from 25% to 27%. 

Growth Data

Now investors await important US growth data later today for the third quarter to gauge the strength of the economy and the likely path ahead for policies. 

The SPDR

Gold holdings at the SPDR Gold Trust rose 1.73 tonnes yesterday to a total of 861.80 tonnes. 

Euro slipped in European trade against a basket of major rivals, extending losses for the third straight session against the dollar ahead of the European Central Bank's policy decisions later today.

Markets expect the ECB to hold interest rates unchanged at 4.50% after 10 successive rate hikes. 

EUR/USD

EUR/USD fell 0.3% to 1.0533, with a session-high at 1.0569, after losing 0.25% on Wednesday, the second loss in a row, on profit-taking off five-week high at 1.0695. 

Euro also declined on renewed concerns about economic recession in Europe following grim manufacturing and services data for October.

ECB

Markets await the results of the European Central Bank's meeting today as inflation continued to slow down in September while the economy brakes.

The ECB directly hinted at the September meeting at reaching peak interest rates already to control inflation and bring prices to normality. 

ECB President Christine Lagarde back then expressed belief that current interest rates are enough to achieve inflation targets.

When Hamas stroke Israel earlier this month, some remembered the 1973 oil crisis, at which an Arab-Israeli war led to a total Saudi ban of oil exports to major western economies, leading to massive shortages worldwide. 

Obviously, the situation now is radically different, the number of producers outside of the OPEC organization is much larger now, led by the US itself. 

Even as things change, a shortage of sorts could still happen, although with a smaller impact. 

Today the US is not just an oil producer, it's still also an aggressive importer, averaging nearly 6 million bpd in the past few years. 

India and China also became major movers of the markets due to their massive exports, with China alone importing 11.4 million bpd in the first half of the year.

Now traders are talking about potential $100 a barrel Brent prices this year, especially as natural gas imports in Europe remain wobbly as well due to the ongoing Russian conflict among other reasons. 

It's clear the world now has to worry about natural gas availability in addition to oil availability, especially as Israel became a major producer of gas in the eastern Mediterranean. 

A potential deterioration of the conflict would involve Iran and mutual strikes with Israel, which could damage Iranian oil infrastructure. 

The war has revealed many crucial facts, chief of which the weakness of the US-Saudi relations, especially as Saudi Arabia was preparing to normalize relations with Israel before the crisis blew out of control, torpedoing the approach. 

Another crucial fact is that, while the world invests hundreds of billions of dollar in alternative energy resources, it's still heavily relying on oil as the major source of energy worldwide. 

A shock to the oil supply system would be catastrophic, and prices remain highly sensitive to conflict in the Middle East, as we saw that simple developments like diplomatic efforts in the weekend to contain the conflict shaved a dollars off prices in quick reactions.