© Reuters.

Investing.com– Gold prices firmed in Asian trade on Thursday, with futures testing key levels as demand for traditional safe havens helped the yellow metal largely disregard a resurgence in the dollar and yields. 

Fears of a potential escalation in the Israel-Hamas war remained in play as missile strikes on Gaza continued, while Israel reiterated its commitment to a ground assault on the region. 

This kept safe haven demand for gold upbeat, even as the and Treasury yields spiked in overnight trade.

rose 0.5% to $1,988.85 an ounce, while expiring in December rose 0.2% to $1,999.20 an ounce by 00:53 ET (04:53 GMT). 

US GDP, Fed meeting present gold risks 

But while gold was enjoying some safe-haven demand, it still remained at risk from upcoming U.S. economic readings. Third-quarter U.S. data, due later on Thursday, is expected to show a sharp pick-up in growth. 

While signs of strength in the U.S. economy are expected to improve risk appetite, they are also expected to give the Federal Reserve more headroom to keep interest rates higher for longer. data for September- the Fed’s preferred inflation gauge- is also due on Friday.

The central bank is set to keep rates on hold . But Fed officials have left the door open for at least one more hike this year, and have signaled that rates will remain higher for longer amid sticky inflation and a strong economy.

This scenario bodes poorly for gold, given that higher rates push up the opportunity cost of investing in bullion. Any potential deescalation in the Israel-Hamas war could also potentially dent safe haven demand for gold. 

Before the Fed, the is set to meet later on Thursday, and is widely expected to keep rates on hold. But the ECB is also expected to signal higher-for-longer rates, despite signs of a looming euro zone recession.

Copper on hold in anticipation of more US, China cues 

Among industrial metals, copper prices steadied from recent losses on Thursday, with traders remaining focused squarely on the upcoming U.S. GDP reading. 

rose 0.1% to $3.5903 a pound. 

Copper prices had taken little support from more Chinese stimulus measures this week, as signs of a looming euro zone recession pushed up concerns over slowing copper demand in the coming months.