Forex Signal Bullish

Middle East turmoil props gold for fifth straight weekly gain

Amidst the tumult in the Middle East, gold continues its ascent for the fifth consecutive week. The allure of the precious metal strengthens as geopolitical tensions heighten, driven by escalating hostilities between Iran and Israel.

The value of gold surged on Friday, positioning itself for a fifth straight week of gains. Investor interest in this safe-haven asset intensified due to mounting concerns over the possibility of a broader regional conflict.

The current spot price of gold stands at $2,385.22 per ounce, marking a 0.3% increase from the previous session and reaching a peak of $2,417.59. Last week, gold achieved an unprecedented high of $2,431.29.

In parallel, U.S. gold futures stabilized at $2,397.60.

Reports indicate that Israel initiated an incursion into Iranian territory following Iran’s retaliation for a suspected Israeli strike on its consulate in Syria. Despite this, Iran downplayed the incident and dismissed the notion of further reprisals.

Peter Fertig, an analyst specializing in Quantitative Commodity Research, noted, “The escalating geopolitical tensions between Iran and Israel, compounded by the recent attack on Iranian soil, elevate the risk of an expanded conflict, thus bolstering the appeal of gold as a safe-haven asset.”

Meanwhile, consensus among U.S. Federal Reserve policymakers suggests a lack of urgency in implementing interest rate cuts, citing sluggish progress in inflation and the resilience of the American economy.

Commerzbank anticipates gold prices to reach $2,300 by year-end, up from their previous projection of $2,200. However, skepticism persists regarding the sustainability of gold’s upward trajectory, given the prevailing trend in U.S. interest rate expectations.

The attractiveness of gold diminishes in the face of rising interest rates, as it lacks yield. Nevertheless, bullish sentiment prevails, fueled by robust Chinese demand prospects and lingering macroeconomic uncertainties, according to insights from Antaike, a Chinese state-backed research institution.

In contrast, spot silver experienced a modest uptick of 0.5% to reach $28.37 per ounce, registering gains for the week. ANZ highlighted silver’s potential to outperform gold, citing its lower price point and favorable fundamentals, which are likely to attract greater investment interest.

Meanwhile, spot platinum advanced by 0.5% to $939.95, while palladium dipped by 0.6% to $1,017.18. Both metals are on track for weekly declines.