Gold shines bright as geopolitical tensions rise

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MG News | October 09, 2023 at 10:34 AM GMT+05:00

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October 09, 2023 (MLN): International gold prices rose by nearly 1% on Monday due to increased demand for safe-haven assets amid the ongoing Israel-Palestine conflict.

International spot gold is currently trading at $1,850.07, up by 0.98% compared to the previous close.

“Gold has regained its safe-haven status following the geopolitical events over the weekend,” City Index Senior Analyst Matt Simpson said, as Reuters reported.

“We see the potential for gold to head for $1,880, but unless we see bond yields move materially lower, I doubt it can break $1,900 any time soon.”

The spiraling violence threatens to start a major new war in the Middle East, sending oil prices higher and boosting the demand for safe-haven assets like Treasuries, the dollar, the Japanese yen along gold.

But bullion’s upside remained capped by strong U.S. economic data that has bolstered the view that the Federal Reserve is unlikely to end its monetary policy tightening cycle in the near term.

Data last week showed U.S. employment increased by the most in eight months in September, pointing to persistent labor market strength. A hot inflation print later in the week could pave the way for another U.S. rate hike this year.

Higher U.S. rates raise the opportunity cost of holding gold, which yields no interest.

Meanwhile international spot silver is currently trading at $21.78, up by 0.88% on the day.

Copyright Mettis Link News

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