Gold rallies above $2,400 as Middle East risks stoke demand
Bullion climbed as much as 1.2% to $2,400.67, silver traded at the highest since 2021
Gold jumped to another record as the safe haven asset was boosted by simmering tensions in the Middle East.
Bullion climbed as much as 1.2 per cent to $2,400.67, while silver traded at the highest since February 2021.
Israel is bracing for an attack from Iran in the next two days, a retaliation for its strike on the country's diplomatic compound in Syria last week, the Wall Street Journal reported, citing a person familiar with the matter.
"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 and a Bloomberg Opinion columnist, wrote in a post on X.
The precious metal has powered higher this year, dragging silver along with it, as central banks including China's stepped-up purchases of the costlier metal, while heightened geopolitical risks in the Middle East and Ukraine lend support. In addition, traders have also been assessing the scope for rate cuts from the Federal Reserve over 2024, although recent, still-strong inflation prints from the top economy have muddied that outlook.
Spot gold was 1 per cent higher at $2,396.11 an ounce at 9:43am in London, with the metal on pace for a fourth weekly advance, the best run since early 2023. Silver rallied to as high as $29.2295 an ounce. Still, both metals' 14-day relative-strength indexes are well above 70, beyond the level that some investors see as overbought, potentially heralding a pause.
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 prices in the greenback as it's can dull interest from overseas buyers.