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  • Monday, 15 July 2024
Gold Prices Hit Record High Amid Middle East Tensions

Gold Prices Hit Record High Amid Middle East Tensions

 

Increased Geopolitical Tensions Boost Safe Haven Demand

Gold prices surged to a record high in Asian trade on Monday due to heightened geopolitical tensions in the Middle East. Spot gold rose nearly 1% to reach $2,440.56 an ounce, while June gold futures hit a record $2,444.55 an ounce.

 

Middle East Stability in Focus After Iran Helicopter Crash

The spike in gold prices was fueled by reports of a helicopter crash carrying Iranian President Ebrahim Raisi and his foreign minister amid bad weather conditions. Rescue efforts are ongoing, but Iranian officials have indicated that their lives are at risk. Raisi, a potential contender for Iran’s next supreme leader, is known for his hardline stance on domestic protests and morality laws.

Gold had previously hit record highs in April due to fears of a potential war between Israel and Iran, although such a conflict did not occur. Renewed instability in the Middle East is once again boosting demand for the yellow metal. Additionally, ongoing strikes by Israel against Gaza have kept regional tensions high.

 

Broader Geopolitical Concerns

Increased military action between Russia and Ukraine has further supported safe haven demand for gold, as both countries launched strikes against each other over the weekend.

 

Broader Metal Rally Supports Gold

Other precious metals also saw gains on Monday. Platinum futures rose 0.2% to $1,096.50 an ounce, and silver futures surged 3.2% to an over 11-year high of $32.285 an ounce. Broader metal prices have been buoyed by expectations of a U.S. interest rate cut this year, alongside increased demand and tighter supplies, particularly in industrial metals.

 

Focus on Federal Reserve Cues

Investors are also focused on potential signals from the Federal Reserve. Recent soft U.S. inflation readings for April have increased hopes that the central bank may begin trimming rates as soon as September.

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