Gold Prices Surge as Middle East Tensions Rise and Rate Cut Hopes Grow
Markets jittered on Friday as new tensions in the Middle East sent tremors through global finance. Investors fled to gold as a haven in a world of elevated geopolitical risk. The increase comes amid heightened tensions following reported strikes on key facilities, which has heightened fears of a protracted conflict.
Spot gold rose 1.7% to $3,439.79 an ounce, extending weekly advances to over 4%. U.S. gold futures also rose by the same margin, coming closer to the all-time high marked in April. Analysts cite mounting geopolitical stress and hobbling economic conditions as the impetus.
Analysts noted that any response to the attacks could trigger further market volatility. Many investors are holding onto gold as a protective measure against escalating conflict. The current market reaction reflects both fear and calculated positioning, as traders look to safeguard their portfolios in an increasingly unstable global environment.
The rally also gained support from weaker-than-expected U.S. inflation data earlier in the week. The most recent Consumer Price Index report showed a less-than-expected increase, leaving speculation open as to whether the central bank would start cutting interest rates as soon as September. That, along with falling bond yields and a weaker dollar, was supportive of gold.
Long-term sentiment is maintaining an upbeat outlook. In the case of gold, analysts predict the metal could climb to $3,700 by the close of 2025, perhaps hitting $4,000 as soon as the middle of 2026, driven by central bank buying and economic turmoil. More and more banks are now also predicting that gold will rise over the next 12 months.
Demand for physical gold on the ground cooled off a little in the main Asian markets. In India, prices climbed above 100,000 rupees for 10 grams, discouraging retail buying. Even so, investors in general continue to covet gold for its historical role as a safe haven during times of turmoil.
Silver slipped 0.3 % to $36.24, but weekly gains still stand. Platinum dropped 3.9%; however, it recorded a gain of 6.3% for the week, and palladium declined 0.3%. In the end, precious metals gained as investment caution kicked in and the economic outlook changed.
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International Business Times
a day ago
- International Business Times
Gold Prices Surge as Middle East Tensions Rise and Rate Cut Hopes Grow
Markets jittered on Friday as new tensions in the Middle East sent tremors through global finance. Investors fled to gold as a haven in a world of elevated geopolitical risk. The increase comes amid heightened tensions following reported strikes on key facilities, which has heightened fears of a protracted conflict. Spot gold rose 1.7% to $3,439.79 an ounce, extending weekly advances to over 4%. U.S. gold futures also rose by the same margin, coming closer to the all-time high marked in April. Analysts cite mounting geopolitical stress and hobbling economic conditions as the impetus. Analysts noted that any response to the attacks could trigger further market volatility. Many investors are holding onto gold as a protective measure against escalating conflict. The current market reaction reflects both fear and calculated positioning, as traders look to safeguard their portfolios in an increasingly unstable global environment. The rally also gained support from weaker-than-expected U.S. inflation data earlier in the week. The most recent Consumer Price Index report showed a less-than-expected increase, leaving speculation open as to whether the central bank would start cutting interest rates as soon as September. That, along with falling bond yields and a weaker dollar, was supportive of gold. Long-term sentiment is maintaining an upbeat outlook. In the case of gold, analysts predict the metal could climb to $3,700 by the close of 2025, perhaps hitting $4,000 as soon as the middle of 2026, driven by central bank buying and economic turmoil. More and more banks are now also predicting that gold will rise over the next 12 months. Demand for physical gold on the ground cooled off a little in the main Asian markets. In India, prices climbed above 100,000 rupees for 10 grams, discouraging retail buying. Even so, investors in general continue to covet gold for its historical role as a safe haven during times of turmoil. Silver slipped 0.3 % to $36.24, but weekly gains still stand. Platinum dropped 3.9%; however, it recorded a gain of 6.3% for the week, and palladium declined 0.3%. In the end, precious metals gained as investment caution kicked in and the economic outlook changed.
Straits Times
a day ago
- Straits Times
Israel-Iran tensions fuel gold to near two-month high as investors seek safe haven
Gold prices have been rising as unrest, wars and uncertainties push investors to safe havens. PHOTO: REUTERS Follow our live coverage here. NEW YORK – Gold prices rose to a near two-month high on Friday, driven by safe-haven demand as Israel's strikes on Iran escalated tensions in the Middle East. Spot gold was up 1.1 per cent at US$3,419.69 an ounce as of 1125 GMT (7.25pm Singapore time), after hitting its highest point since April 22 earlier in the session. Bullion has gained more than 3.3 per cent so far this week. US gold futures gained 1.1 per cent to US$3,439.90. The Middle East was thrust into renewed conflict after Israel launched strikes against Iran, saying it targeted nuclear facilities, ballistic missile factories and military commanders and that this was the start of a prolonged operation to prevent Tehran from building an atomic weapon. Iran launched about 100 drones towards Israeli territory in retaliation. The rising tensions add another layer of market uncertainty, coming on the heels of US President Donald Trump's trade policies. 'For now, the attacks add to the bullish mood in the gold market… With the situation being highly in flux, it is too early to tell whether this shock will lastingly lift prices,' said Mr Carsten Menke, an analyst at Julius Baer. 'Should there be disruptions to oil supplies – either directly due to attacks or indirectly due to politically imposed measures – or should the conflict spread in the region, then gold could show a more lasting reaction,' he said. Gold is used as a safe investment during times of geopolitical and economic uncertainty. It also tends to thrive in a low-interest-rate environment. 'We now expect a gold price of US$3,400 per troy ounce by the end of (2025) and US$3,600 by the end of (2026),' Commerzbank said in a note. Demand for physical gold weakened across major Asian hubs this week, as soaring prices deterred buyers, with rates in India surging past the psychologically key 100,000 rupee mark. Spot silver was down 0.5 per cent at US$36.2 per ounce, platinum fell 2.7 per cent to US$1,259.94, and palladium fell 0.4 per cent to US$1,051.68. All three metals were set for weekly gains. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
2 days ago
- Straits Times
Singapore shares fall on Friday amid Middle East tensions; STI down 0.3%
Dip in STI mirrors loss in global equity markets on fears Israel's strikes on Iran could stoke wider regional conflict. ST PHOTO: BRIAN TEO SINGAPORE – Local shares dipped on June 13 after escalating conflict in the Middle East prompted investors to sell up and reduce their risk exposure ahead of the weekend. There was hardly a rush to the exits, but the sell-off did leave the Straits Times Index (STI) down 0.3 per cent or 10.78 points at 3,911.42 with losers easily outstripping gainers 359 to 160 on trade of one billion securities worth $1.3 billion. Jardine Matheson was the top blue-chip gainer, rising 1.8 per cent to US$45.44, while Seatrium was the biggest decliner, down 2.8 per cent to $2.06. The local banks fell. DBS dropped 0.5 per cent to $44.45, OCBC closed 0.5 per cent down at $16.06 and UOB shed 0.4 per cent to $34.95. The Israeli strikes on Iran also sent Asian and European stocks tumbling while US index futures slipped in pre-market trade. Investors also rushed to safer assets and helped send gold and the greenback higher. 'Oil and defence stocks will likely benefit from rising tensions, but the rest of the market should remain under pressure,' said Swissquote Bank analyst Ipek Ozkardeskaya. Most regional markets declined and many took a bigger hit than the STI. China's Shenzhen Component led the losers, shedding 1.1 per cent, while South Korea's Kospi and the Nikkei 225 in Japan each shed 0.9 per cent. Australian shares got off relatively lightly, with the ASX 200 index closing down 0.2 per cent Wall Street traders, who were mostly off duty when the air strikes occurred, were focused on the bond market in a positive trading session overnight, with investors growing more confident that another cut in interest rates is imminent. Stocks, meanwhile, dipped in early trading before reversing course in the afternoon, with investors giving little heed to new threats of tariffs from President Trump. The S&P 500 led gains, rising 0.4 per cent, while the Dow Jones Industrial Average and Nasdaq each climbed 0.24 per cent. THE BUSINESS TIMES Join ST's Telegram channel and get the latest breaking news delivered to you.
