Gold prices climbed on Thursday. A widening conflict involving the US, Israel, and Iran drove investors toward the safe-haven asset.
Spot gold was up 0.8 per cent at $5,177.33 per ounce, as of 04:35 (GMT) US gold futures for April delivery were up 1pc at $5,185.50.
“Gold benefits from the kind of geopolitical risks that we’ve seen flared up in the last few days. Prices rose due to the normalization of financial conditions. Additionally, a US dollar pulling back from its highs helped the rise.” said Kyle Rodda, senior financial market analyst at Capital.com.
The dollar retreated from a more than three-month high touched earlier this week. This retreat makes greenback-priced bullion less expensive for holders of other currencies.
The war widened sharply on Wednesday after a US submarine sank an Iranian warship off Sri Lanka, killing at least 80 people, and Nato air defences destroyed an Iranian ballistic missile fired towards Turkey.
The escalation occurred as the son of Iran’s slain supreme leader, Ayatollah Ali Khamenei, emerged. He was a frontrunner to succeed him. This suggests Tehran was not about to buckle to pressure. This development occurred five days after the US and Israel launched a military campaign that has killed hundreds and convulsed global markets.
“I think this crisis is something that supports gold prices in the long run. But the uncertainty surrounding the war means we will continue to see heightened volatility until we see signs that we’ve reached peak escalation,” Capital.com’s Rodda said.
Bullion is traditionally viewed as a safe-haven asset. It has risen about 20pc so far this year. This increase is notching successive record highs amid heightened global political and economic uncertainty.
US President Donald Trump officially nominated former Federal Reserve Governor Kevin Warsh. Warsh is to be the next chair of the US central bank. This nomination puts the president one step closer to installing a rate-cut-friendly Fed chief.
Markets expect the Fed to keep interest rates steady on March 18, according to CME Group’s FedWatch tool.
Investors now await the weekly US jobless claims data. These figures are due later in the day. Additionally, they are looking forward to the US employment report for February on Friday.
Spot silver rose 1.7pc to $84.86 per ounce. Platinum climbed 1.4pc to $2,179.48, and palladium gained 0.5pc to $1,682.85.
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