The price of gold rose more than 1% on Monday, as the military conflict between the forces Israelis and the Palestinian Islamist group Hamas increased political uncertainty in the Middle East, prompting safe-haven buying in investments such as bullion.
Israel bombed the Palestinian enclave of Gaza on Sunday, killing hundreds of people in retaliation for one of the bloodiest attacks in its history, when Hamas gunmen stormed Israeli cities on Saturday.
Gold is used as a safe investment in times of political and financial uncertainty.
He gold spot rose 1% to US$1,850.70 per ounce at 0921 GMT, after reaching its highest level in a week. US gold futures gained 1.1% to US$1,865.10.
He gold has benefited, at least in the short term, from the rebound in geopolitical tensions, as investors are looking for safe haven assets, said Giovanni Staunovo, an analyst at UBS.
The spiral of violence between Israel and Hamas threatens to trigger a new major war in the Middle East, sending oil prices soaring and driving demand for safe-haven assets such as US Treasuries, the dollar and the Japanese yen, along with with gold
“That said, high US interest rates will continue to be a headwind for gold. We only expect gold prices to rise once the Federal Reserve starts to become more dovish throughout 2024″Staunovo added.
A positive inflation data later in the week could pave the way for another hike in US interest rates this year, making gold less attractive. Investors are also awaiting the minutes of the US central bank’s September meeting, which will be released on Wednesday.
Among other precious metals, spot silver rose 0.4% to $21.68 an ounce, platinum rose 0.9% to $884.41 and palladium was flat at $1,158.33.
Source: Gestion
Ricardo is a renowned author and journalist, known for his exceptional writing on top-news stories. He currently works as a writer at the 247 News Agency, where he is known for his ability to deliver breaking news and insightful analysis on the most pressing issues of the day.
