THE price of gold stormed to a fresh all time high as the safe haven asset was boosted by simmering Middle East tensions.
Bullion broke the $2,400-an-ounce mark for the first time on Friday morning, climbing as much as 1.2% to $2,400.67. The US and its allies believe a major missile attack by Iran or its proxies is imminent in retaliation for an Israeli strike on its embassy compound in Syria, said Bloomberg News.
“Gold prices are up again this morning, as more investors view it as a better hedge against geopolitical risk than government bonds due to US inflation concerns,” Mohamed A. El-Erian, the president of Queens’ College in Cambridge wrote in a post on X.
Platinum and palladium also advanced, even as the Bloomberg Dollar Spot Index traded near the highest level since November. A stronger US currency is typically a headwind for commodities priced in the greenback as it can dull interest from overseas buyers.
“Geopolitical risk is the fulcrum here,” said Rhona O’Connell, head of market analysis at StoneX Financial Ltd. In a year with more than 50 local and national elections, ongoing tensions in the Middle East add “further fuel to the fire.”
There is potential for more upside in prices amid central bank purchases and as demand for safe-haven assets rise with growing anxiety among investors about geopolitical conflicts escalating, Ricardo Evangelista, senior analyst at ActivTrades told Reuters.
Concern about “the Chinese economy feeds into worries about growth of the global economy and this also compounds the market sentiment of seeking safe-haven assets,” he added.
Gold’s strength appears to have filtered through to support silver prices, and industrial production figures released on Tuesday gave a further signal on industrial demand for silver, Frank Watson, market analyst at Kinesis Money, wrote in a note.
