Gold Extends Rally: Geopolitical Concerns Fuel Price Rise

19 Apr 2024 , 11:09 AM

On course for their fifth weekly rise, gold prices increased on Friday as investors flocked to safe-haven assets as pressure from the prospect of higher-for-longer U.S. interest rates was eclipsed by political unrest in the Middle East.

Spot gold was up 0.4% at $2,388.49 an ounce. American gold futures increased by 0.2% to $2,403.30 an ounce. For the week, gold has increased by 3%.

Following its strike on Israel, the U.S. imposed additional restrictions on Iran, targeting the country’s manufacture of unmanned aerial vehicles.

With slow and erratic progress on inflation and a robust U.S. economy, Federal Reserve policymakers have united around the idea of keeping borrowing costs where they are until perhaps far into the year.

The number of Americans submitting new claims for unemployment benefits last week remained stable at low levels, suggesting that the work market is still strong.

Raphael Bostic, president of the Atlanta Federal Reserve Bank, stated that central bankers would have to think about raising interest rates if inflation continued to stall.

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

Despite experts saying the metal is ready for a technical correction, silver may be able to break through to $30 per ounce following its 26% rise in March and April on the strength of copper and gold’s record run.

Sibanye Stillwater of South Africa will close its 4 Belt shaft at Marikana and lay off 855 employees after its attempts to earn a profit were unsuccessful owing to low pricing for platinum group metal (PGM).

Asian markets are hoping to finish a brutal week on a high note, but any gains may be limited by waning global sentiment and a reluctance to take on significant risk before the weekend due to ongoing tensions in the Middle East.

Spot silver increased 0.7% to $28.41 per ounce, palladium decreased 0.6% to $1,016.25, and platinum increased 0.6% to $940.70.

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