Gold prices have risen sharply as escalating conflict in the Middle East rattles markets, prompting investors to seek safer assets. Bullion climbed more than 2 per cent to around $US5390 an ounce in early trading, adding to gains of over 3 per cent from the previous week. This surge follows reports of increased military action in the region, including attacks involving the US, Israel, and Iran. The geopolitical instability has spurred demand for gold as a traditional safe-haven investment.
Wider geopolitical tensions and shifts in international relations have been significant drivers of gold’s long-term rally. This has been further supported by strong central bank buying and a broader investor move away from sovereign bonds and currencies. Gold has increased approximately a quarter of its value this year, although it experienced a sharp pullback from a record high of over $US5595 an ounce in late January.
The precious metal recorded its seventh consecutive monthly gain in February, marking its longest streak since 1973. Even before the recent outbreak of war, heightened international tensions were already apparent, with events such as the US military action in Venezuela and threats regarding Greenland contributing to market uncertainty.
According to Ahmad Assiri, a strategist from Pepperstone, gold’s rise is “an early indication of investors seeking safe-haven assets amid the escalating regional uncertainty”. Spot gold was up 1.9 per cent to $US5380.91 an ounce as of 7.40 am in Singapore (10.40am AEDT). Other precious metals also saw gains, with silver advancing 2.4 per cent to $US96.04, and platinum and palladium also increasing in value.
