(MENAFN) On Thursday, gold prices saw an uptick driven by mounting concerns over the escalation of conflict in the Middle East, fueling demand for safe-haven assets. This surge offset the impact of speculation surrounding the likelihood of high interest rates persisting in the United States. As geopolitical uncertainties loomed, investors turned to gold as a traditional hedge against volatility and geopolitical risks.
Updating the latest prices, gold in instant transactions rose by 0.6 percent to reach USD2,374.97 per ounce as of 0429 GMT. This increase followed a recent peak recorded last Friday, where gold reached its highest level ever at USD2,431.29. Similarly, US gold futures edged up by 0.1 percent to USD2,389.70, reflecting sustained interest in the precious metal amidst prevailing geopolitical tensions.
Kelvin Wong, Chief Market Analyst for Asia-Pacific at OANDA, emphasized the role of geopolitical uncertainty in bolstering gold prices, noting that such uncertainties continue to underpin the bullish sentiment surrounding the precious metal. Heightened tensions in the Middle East, particularly in light of recent actions by Iran and Israel, have contributed to the allure of gold as a safe-haven asset.
Israeli Prime Minister Benjamin Netanyahu's assertion that Israel will independently determine its response to threats underscores the volatile geopolitical landscape. While Western countries have urged restraint in responding to Iran's recent actions, the potential for further escalation adds to the appeal of safe-haven assets like gold.
Despite the geopolitical backdrop, the prospect of high interest rates in the United States has exerted downward pressure on gold prices. Historically, gold's appeal diminishes in environments characterized by elevated interest rates, as it reduces the attractiveness of holding non-yielding bullion.
In addition to gold, other precious metals also witnessed movements in Thursday's trading session. Silver saw a 0.6 percent increase in spot transactions, reaching USD28.38 per ounce, while platinum settled at USD938.40. Palladium edged up by 0.2 percent to USD1,027.82, reflecting mixed sentiments across the precious metals market amidst ongoing geopolitical tensions and interest rate expectations.
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