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Gold Jumps After Iran Strike Against Israel Stokes Haven Demand
Gold Surges as Iran’s Attack on Israel Spurs Haven Demand
Gold prices surged by 1.7% as Iran’s unprecedented attack on Israel escalated tensions in the Middle East, driving up demand for the safe-haven asset. The conflict raised concerns about potential retaliation by Israel, pushing gold closer to last week’s record high of $2,400 per ounce.
Quick Facts:
- Iran’s attack on Israel led to a 1.7% surge in gold prices, driven by increased haven demand.
- Gold broke through $2,400 per ounce last week, but technical indicators led to a session close lower.
- Wall Street banks, including Goldman Sachs, have raised their year-end gold price forecasts, with the latter predicting a target of $2,700 per ounce.
Gold prices rallied by almost 20% since mid-February, defying expectations of Federal Reserve interest rate cuts. The surge was supported by robust central bank buying and increased demand from Chinese consumers. Geopolitical risks in the Middle East and Ukraine further boosted gold’s appeal as a safe-haven asset.
Despite the lack of interest payments, gold’s rally has been sustained by factors such as lowered expectations for Fed rate cuts and raised price forecasts by major banks. The metal’s price climbed 1.6% to $2,380.72 per ounce in New York, with silver rising 3.5% while platinum and palladium fell.
Gold’s medium-term trajectory is likely to remain upward due to the geopolitical premium being priced into its movements, according to Chris Weston, head of research at Pepperstone Group Ltd. The escalating tensions in the Middle East have reignited the flight to safety, with fears of potential retaliation by Israel expected to support gold in the near term.
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