Gold Jumps 1.6% Amid Rising Tensions in the Middle East
Gold prices rose sharply on Wednesday, recording a jump of 1.6% in spot transactions to reach $5168.69 per ounce, after a sharp drop on Tuesday to its lowest level since February 20.
This movement reflects the escalating geopolitical tensions in the Middle East, following U.S. and Israeli airstrikes on Iran, prompting investors to seek safe havens.
U.S. gold futures for April delivery also rose by 1.1% to $5178.40.
In contrast, gold had fallen by more than 4% in the previous session due to a rising dollar and declining prospects for interest rate cuts amid inflationary concerns.
Elia Spivak, Head of Global Macro at Tasty Live, said:
"It wouldn't be surprising if gold ignores these movements over several days; it tends to follow its own path and remains resilient regardless of the dollar's performance."
Other precious metals also saw notable increases:
• Silver rose 3.5% to $84.92 per ounce after dropping more than 8% on Tuesday.
• Platinum increased by 2.7% to $2139.56 per ounce.
• Palladium rose 1.6% to $1673.87 per ounce.
In this context, global oil and gas prices rose due to disruptions in energy exports from the Middle East following Iran's attacks on ships and energy facilities, forcing Qatar and Iraq to halt production and disrupting navigation in the Gulf.
This rise in energy prices has heightened inflationary fears and negatively impacted global stock markets.
Analyst Christopher Wong from OCBC said:
"The rise in oil prices due to geopolitical tensions in Iran increases inflation concerns and complicates expectations regarding monetary easing."
Regarding monetary policy, the CME Group's FedWatch tool indicates that investors expect the U.S. Federal Reserve to keep interest rates unchanged at its upcoming meeting on March 18.
