Gold is making strong leaps due to regional tensions.
Global gold markets recorded a strong performance during the week ending on Friday, June 13, with prices rising by about 4% driven by a wide buying wave following the military escalation between Israel and Iran. The price per ounce reached $3450 as investors turned to safe assets amid geopolitical concerns.
Spot gold prices saw a clear jump of 1.3% to settle at $3428.10 per ounce, nearing its historical peak recorded in April at $3500.05. Meanwhile, gold futures witnessed a notable rise of 1.4% to reach their highest levels since last April, while the SPDR Gold Trust (GLD) rose by 1.2%.
In a related context, Goldman Sachs reaffirmed its positive outlook for the future of gold, expecting strong central bank purchases to push prices to $3700 per ounce by the end of 2025, and then to $4000 by mid-2026. These forecasts align with Bank of America's expectation of prices reaching $4000 in the next twelve months.
Despite this strong performance, some key Asian markets witnessed a decline in demand due to the significant price increase, with gold prices in India surpassing 100,000 rupees, a psychologically important level affecting consumer purchasing decisions.
As for other metals, silver experienced mixed movements, decreasing by 0.3% to $36.27 per ounce despite weekly gains of 0.9%. Platinum recorded a sharp decline of 5.9% to $1219.03, while palladium dropped by 1.3% to $1041.51.
This performance comes amidst tense atmosphere following Israeli strikes on sites within Iranian territories and Tehran's retaliation by targeting Tel Aviv, prompting investors to reinforce their moves towards safe havens. Current expectations indicate a continued upward trend in prices in the medium term, with geopolitical and economic factors supporting the demand for the precious metal.
