Gold prices edged higher on Tuesday, hovering near last week’s record high, as escalating tensions between Iran and Israel fuelled demand for the safe-haven metal, as reported by Reuters.
Spot gold climbed 0.1 per cent to $2,385.35 per ounce at 0611 GMT, building on Monday’s gains and staying within striking distance of its all-time peak of $2,431.29 reached on Friday. US gold futures hiked 0.8 per cent to $2,401.90.
Matt Simpson, senior analyst at City Index, highlighted the recent Middle East headlines as a key driver, but also noted the underlying support provided by central bank purchases and rising inflation expectations. This, he explained, has revived gold’s role as an inflation hedge.
However, Simpson cautioned that the intraday dip from briefly exceeding $2,400 might indicate profit-taking among some traders, potentially leading to a short-term shakeout at these elevated levels.
Despite stronger-than-expected US retail sales data released on Monday, gold prices still managed to climb 1.6 per cent on the previous session. This has cast doubt on the likelihood of aggressive interest rate cuts by the Federal Reserve.
The market now anticipates fewer than two cuts by year-end, compared to the three cuts expected a month ago.
Analysts at Citigroup projects gold prices to reach $3,000 per ounce within the next 18 months.
While gold comes in the spotlight, other precious metals exhibited mixed performance.
Spot silver dipped 0.7 per cent to $28.69 per ounce, while platinum gained 0.7 per cent to $969.05. Palladium, however, slipped 0.8 per cent to $1,027.50.
