Gold prices gain on continued tensions in the Middle East

Gold prices rose today, Wednesday, to approach record levels, with the increasing risk of the conflict expanding in the Middle East, prompting investors to resort to the precious metal as a safe haven. Short-term declines in the value of the US dollar and US Treasury yields also helped support gold prices.

According to Reuters, gold rose in spot trading by 0.3% to $2,389.38 per ounce by 1014 GMT, a level not far from the highest level ever of $2,431.29 recorded on Friday. US gold futures fell 0.1% to $2,405.10.

Lukman Otunuga, senior research analyst at FXTM, said: “The precious metal is witnessing a major overbought from a technical perspective… Optimistic investors derive their strength from the overall uncertainty in the markets as geopolitical factors cast a shadow on the data and monetary policy expectations.”

The dollar and 10-year Treasury bond yields fell from their highest levels in five months, making the yellow metal priced in the US currency less attractive to holders of other currencies.

Senior Federal Reserve officials, including Chairman Jerome Powell, declined to provide any indications of when to start cutting interest rates, and said that monetary policy must remain under tightening for a longer period.

As for other precious metals, silver rose in spot trading by 1.4% to $28.47 per ounce. Platinum rose 0.1% to $957.50, and palladium rose 0.8% to $1,021.43.