Quick Look:
- Israeli Air Strikes: Killed at least 14 in Gaza, increasing regional tensions.
- Gold Prices: Spot gold rose 0.1% to $2,362.60 per ounce, with a weekly gain of 1%.
- Other Precious Metals: Silver fell 0.3%, while platinum and palladium prices increased by 0.7% and 0.8%.
- Market Analysts: Geopolitical tensions and potential US rate cuts drive gold’s rise, with $2,300 as a key support level.
Thursday witnessed a series of Israeli air strikes in the Gaza Strip, resulting in the deaths of at least 14 individuals and injuring dozens more. This escalation in the Middle East has intensified regional tensions and significantly impacted global markets. The uncertainty stemming from these events has heightened the demand for safe-haven assets, with gold emerging as a primary beneficiary of this shift in investor sentiment.
Gold Increases 0.1%, Weekly Gain of 1%
The precious metals market has responded to these geopolitical and economic developments with notable price movements. Spot gold saw a slight increase of 0.1% to $2,362.60 per ounce at 0516 GMT on Friday, maintaining gains from a two-week high reached in the previous session. Over the week, spot gold rose by 1%, adding to a 1.7% increase from the previous week, while US gold futures experienced a 0.2% rise, reaching $2,374.60.
Silver Down 0.3%, Platinum and Palladium Prices Rise
In contrast, silver prices declined by 0.3% to $30.61 per ounce, following an earlier dip to $30.60 per ounce. Platinum prices increased by 0.7% to $984.95 per ounce, having previously risen by 0.4% to $982.45 per ounce. Similarly, palladium prices saw an uptick of 0.8%, reaching $930.75 per ounce, with a comparable rise earlier to $930.98 per ounce.
Analysts: Gold’s Rise Driven by Geopolitical Tensions
Market analysts attribute the bullish momentum in gold to the escalating geopolitical tensions. This is particularly evident following the attacks in Gaza. Additionally, the market closely monitors the likelihood of another US rate cut post-September. Such a rate cut could support gold prices, maintaining them above the crucial $2,300 level.
Nevertheless, while corrections in the gold market remain possible, the $2,300 support level is seen as vital. Significant downturns could be driven by shifts in economic indicators or abrupt market movements. Furthermore, analysts highlight that the current movement in gold prices is driven by both geopolitical uncertainties and economic considerations. This reflects the complex interplay between these factors.
US Flash PMIs to Impact Market at 0145 GMT Friday
Market participants are awaiting the release of US flash purchasing managers’ indexes, scheduled for 0145 GMT on Friday. These indexes will provide further insight into economic health and could influence market expectations regarding future Federal Reserve actions. As tensions persist and economic indicators fluctuate, the market remains vigilant, assessing the implications for future monetary policy and asset prices. The ongoing geopolitical unrest and mixed economic data continue to drive investor behavior, with safe-haven assets like gold benefiting from the current climate.
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