Gold prices are surging, with the precious metal briefly crossing the $1,850 mark early on Monday as escalating tensions in the Middle East send shockwaves through global markets. Investors are seeking refuge in traditional safe havens like gold, the US dollar, and Treasuries.
Geopolitical risks have once again taken center stage following an unprecedented move by the Hamas militant group in Gaza, Palestine, launching attacks on Israeli towns. In response, Israel initiated airstrikes on Gaza and declared war on the Palestinian enclave, intensifying the conflict in the region.
Gold prices are benefiting from investor concerns that this geopolitical turmoil could lead to a fresh surge in oil prices, posing a threat to global inflation and the economic outlook. Already, oil prices have climbed over 4% in response to the Middle East conflict, raising concerns about oil supply disruptions.
However, the potential for further gains in gold prices is tempered by the strengthening US dollar, which is also experiencing increased demand as a safe-haven asset.
Adding to the market dynamics is the fact that Japan is observing a holiday, which can exaggerate price movements in gold. Investors are closely monitoring developments in the Middle East, movements in oil prices, and the upcoming release of US inflation data for fresh trading direction.
As of the latest update, gold prices have risen by 0.94% to trade at $1,850, reaching a fresh five-day high at $1,856 in early trading. The evolving situation in the Middle East will remain a key driver of gold prices in the coming days as investors navigate the uncertain geopolitical landscape.