GG News Bureau
Mumbai, 13th June: Gold prices surged on Friday, hitting their highest point in over a month and poised for a strong weekly gain. Investors flocked to the safe-haven asset as tensions between Israel and Iran escalated, while new US economic data bolstered hopes for earlier interest rate cuts.
Spot gold climbed 1.3% to $3,428.28 per ounce by 0134 GMT, marking its highest level since May 7. The precious metal has already gained over 3.5% this week. US gold futures also saw a significant rise, up 1.4% to $3,449.60.
Geopolitical Jitters Fuel Demand
The sharp increase follows reports of Israel’s strikes on Iran, further intensifying the already volatile situation in the Middle East. Tensions have been mounting amidst US efforts to curb Iran’s atomic bomb material production.
“This latest spike in hostilities in the Middle East has taken the focus off trade negotiations for now,” commented Tim Waterer, chief market analyst at KCM Trade. “Investors are making a play towards safe-haven assets in response.”
Concerns are heightened by Israel’s declaration of a state of emergency, anticipating missile and drone attacks from Tehran. A US official, speaking anonymously to Reuters, confirmed that the US military is preparing for various contingencies in the Middle East, including potential evacuations of American civilians.
Waterer added, “Gold surged past resistance around $3,400 on news of the airstrikes. Further upside could be in store should the escalation continue.”
US Data Boosts Rate Cut Expectations
Adding to gold’s appeal, recent US economic data points to a cooling labor market and easing inflation. The number of Americans filing new unemployment claims remained at an eight-month high last week, while slower domestic demand helped restrain producer prices in May.
This data, following a moderate rise in consumer prices in May, has increased expectations for an earlier Federal Reserve interest rate cut. Traders now anticipate a 55-basis-point rate cut by year-end, potentially starting in September rather than the previously expected October.
In other precious metals, spot silver dipped 0.1% to $36.33 per ounce, platinum fell 0.8% to $1,285.21, and palladium remained steady at $1,055.21. Despite Friday’s movements, all three metals are still headed for a weekly gain.
