Geopolitical Jitters Drive Rise in Gold Prices

15 Apr 2024 , 09:22 AM

On Monday, gold prices increased somewhat, but below a record high set during the previous session, as the safe-haven appeal of gold was bolstered by growing Middle East tensions.

Spot gold was up 0.3% at $2,350.59 an ounce. On Friday, the price of gold reached a record high of 2,431.29.

The ounce of U.S. gold futures dropped 0.3% to $2,366.40.

Israelis are afraid that a larger conflict is approaching after Iran, their longtime enemy, launched its first direct attack on their country.

Market expectations for a rate decrease from the Fed have been lowered once further as a result of recent U.S. economic statistics regarding the labour market and inflation.

Chicago Federal Reserve President Austan Goolsbee expressed alarm about the sustained high readings of the consumer price index, although he is still watching the behaviour of the Fed’s targeted personal consumption price expenditures index.

Susan Collins, the president of the Federal Reserve Bank of Boston, is planning to decrease interest rates a couple of times this year, anticipating that it may take some time for inflation to return to desired levels.

Having non-yielding gold becomes less appealing when interest rates rise.

Despite the ECB President Christine Lagarde’s insistence that the inflation in the euro zone is different from that in the US, the EU will nevertheless encounter many of the same challenges, which will restrict how far price increase can slow.

Spot silver increased 0.4% to $27.98 per ounce, while palladium dropped 1% to $1,038.99 and platinum decreased 0.1% to $973.05.

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