Gold Rises to Record on Middle East Tension, US Economy Concerns

Gold rose to a record high above $3,028 an ounce as an escalation in Middle East tensions underscored its haven appeal, and investors weighed data that fueled concern the US economy is slowing down, Bloomberg reported.

Bullion climbed as much as 0.9% as Israel launched military strikes on Hamas targets in Gaza, a move that threatens to undermine a shaky truce. Hamas said at least 322 people had been killed or were missing since the airstrikes began.

Traders were also digesting US retail sales data released Monday, which rose less than forecast in February. While the figures pointed to weak spending on goods, there was no sign of a severe pullback and the data did little to alter traders’ bets on expectations for Federal Reserve rate cuts.

Still, companies, investors and economists remain cautious as consumer sentiment sours and signs of financial stress mount, amid risks of escalating trade wars sparked by US President Donald Trump.

The gloomier outlook for both the US and global economy has underscored bullion’s role as a store of value in uncertain times. The metal is up 15% so far this year, extending its strong annual advance in 2024. Several major banks have hoisted their price targets for this year higher in recent weeks.

Inflows into physically-backed gold exchange-traded funds continued for a fifth consecutive day on Monday. The amount of gold held in ETFs has risen 5% this year, after dropping for the past four years, according to data compiled by Bloomberg.

While gold has further room to run, “$3,000 was a strong resistance” in the short term, said Vasu Menon, managing director of investment strategy at Oversea-Chinese Banking Corp. “Even though it’s broken marginally above this, it may not signal a decisive break,” said Menon, who sees bullion rising to $3,100 an ounce within twelve months.

Spot gold was up 0.8% to $3,023.65 an ounce as of 9:28 a.m. in London. The Bloomberg Dollar Spot Index fell 0.1%. Silver, platinum and palladium all rose.