Gold jumps as investors flee the conflict in the Middle East for safety

9 Oct 2023 , 09:16 AM

As a result of fighting between Israeli and Hamas forces over the weekend that increased the possibility of a larger Middle East conflict and increased demand for safe-haven commodities like bullion, gold prices increased by more than 1% on Monday.

Spot gold increased 1% to $1,850.87 per ounce after reaching a record high over the past week. American gold futures increased 1.1% to $1,865.20 for an ounce.

On Saturday, Israeli communities became the scene of a bloodiest day in decades as Hamas fighters rampaged over the country. On Sunday, Israel bombarded Gaza with air strikes, killing hundreds of people on both sides, according to reports.

The Middle East is on the verge of a huge new conflict as a result of the increasing bloodshed, which has driven up oil prices and Treasury yields while falling U.S. stock futures.

On the back of Middle East unpredictability, the safe-haven dollar and Japanese yen both saw slight gains, with the greenback getting an additional boost from a massive jobs report.

Although pay growth is slowing, the United States’ employment climbed in September for the first time in eight months as hiring increased broadly. This indicates that the labour market is still strong, which could give the Federal Reserve justification to hike interest rates once more.

The highly positive hiring figures for last month did not alter Loretta Mester’s assessment of the strength of the labour market, she said on Friday, adding that future data will determine whether the Fed needed to raise rates once more.

The largest gold-backed exchange-traded fund in the world, SPDR Gold Trust, reported that its holdings decreased by 0.2% on Friday to 865.85 metric tons.

A recent price decline attracted purchasers, increasing physical gold demand in some Asian cities last week. Premiums in India reached a 17-month high as jewellers stocked up for the festival season.

Spot silver jumped 1.6% to $21.94 an ounce, platinum rose 0.6% to $881.83, and palladium rose 0.5% to $1,163.49. These are just a few of the metals that saw gains.

For feedback and suggestions, write to us at [e-mail]