Gold close to record highs amid escalating tension in Middle East
Traders keep close eye on developments surrounding Middle East conflict, which has prompted safe-haven buying
Bengaluru — Gold consolidated gains on Monday, hovering near record-high levels hit in the previous session, as traders kept a close eye on developments surrounding the Middle East conflict, prompting safe-haven buying of assets such as bullion.
Spot gold was up 0.6% at $2,356.69/oz by 3.23am GMT, after hitting a record high of $2,431.29 on Friday. US gold futures was steady at $2,373.30.
“Gold remains in vogue as a financial asset given the combination of geopolitical risks and the prospects of Fed interest rate easing in the second half of the year. In many respects, gold is taking on the appearance of being as ‘asset for all occasions’ given its ability to rally under varying market dynamics in 2024,” said Tim Waterer, chief market analyst, KCM Trade.
Bullion rose above the $2,400 level in the previous session and has gained more than 14% so far in 2024, fuelled by strong central bank buying, safe-haven inflows amid continued geopolitical risks.
Despite recent US economic data showing strong labour market and high inflation, Federal Reserve Bank of Boston president Susan Collins is eyeing a couple of interest rate cuts in 2024.
Lower interest rates reduce the opportunity cost of holding bullion.
“The $2,500 is looking more like a viable near to medium-term target while momentum remains on the side of the precious metal [gold], which has been the story so far in 2024,” Waterer said.
China’s physical gold premiums rose last week, driven by strong demand to shore up a depreciating yuan, while record-high prices in India forced dealers to offer discounts for a sixth consecutive week.
Spot silver rose 1.2% to $28.18/oz, after touching its highest level since early 2021 on Friday. Platinum fell 0.2% at $971.95 and palladium lost 0.6% to $1,042.95.
Reuters