In the early hours of Friday’s Asian session, the price of gold surged to nearly $2,410 per troy ounce, driven by escalating geopolitical tensions. The precious metal, known as a safe-haven asset, experienced a notable uptick as reports emerged of Israeli missiles striking a site in Iran, intensifying anxieties across global financial markets.
Confirmation from ABC News regarding the Israeli attack fueled risk aversion sentiments among investors, prompting a flight to safety. This surge in demand for gold was reflective of broader concerns about geopolitical instability in the Middle East.
According to information relayed by Reuters, sourced from Iran’s Fars News Agency, residents in the vicinity of the central Isfahan airport reported hearing explosions. However, the exact cause behind these explosions remains undetermined, with investigations currently underway to ascertain further details of the incident.
While geopolitical developments played a significant role in bolstering gold prices, the strength of the US dollar also influenced market dynamics. Thursday saw Federal Reserve (Fed) officials adopt a hawkish stance, leading to a notable increase in US Treasury yields and bolstering the value of the Greenback. This, in turn, acted as a dampener on the upward momentum of assets such as gold, which do not yield interest.
Atlanta Fed President Raphael Bostic underscored concerns regarding inflation, characterizing current levels as excessively high. Bostic emphasized the necessity for the Fed to continue its efforts in addressing inflationary pressures. Conversely, New York Fed President John Williams reiterated the central bank’s commitment to data-driven decision-making. Williams indicated that, at present, there is no immediate imperative to consider lowering interest rates, reflecting a cautious approach to monetary policy adjustments.