Fundamental Comment

Gold edges closer to 2019 highs as ME tensions escalate

Gold edges closer to 2019 highs as ME tensions escalate

Gold prices climbed more than $22 on Friday trading, edging closer to 2019’s all-time high, as tensions in the Middle East escalated, and therefore boosting demand for safe havens.

As of 11:50 GMT, spot gold hovered around $1,550 an ounce, where the precious metal hit the highest level today at $1550.36, which considered the highest level since September 5, 2019.

The precious metal prices jumped to a four-month high today as tensions in the Middle East increased, following the assassination of Iranian official Qassem Suleimani in a U.S. airstrike.

Iran’s supreme leader, Ayatollah Khomeini, has vowed “harsh retaliation,” thereby raising concerns over a possible major US-Iranian military action.

Despite the rise in the U.S dollar, haven demand helped gold prices to resume their rise for an eighth straight session, heading for a weekly gain of about 1.9 percent, which would be the fourth consecutive weekly advance.

More to mention that the precious metal recorded its biggest annual gain since 2010, as the backdrop of soft monetary policy and tensions in Hong Kong, raising buying rates from central banks and ETFs.

It should be noted that strong tensions on the geopolitical front are pushing everyone, including central banks, to buy gold in order to hedge the risks to global economies from any violent event.

Later in the day, investors will focus on the Fed minutes for December’s meeting, which may give a view on the members’ plans for interest rates in 2020.

“Thirteen of 17 officials forecast rates would be unchanged through the 2020 U.S. presidential election year, according to updated economic projections issued at the time, with four penciling in a quarter-point increase. No one forecasts a rate cut through the end of 2022,” according to Bloomberg.

As for other precious metals, silver rose 1.06 percent to $18.23, Platinum gained 0.69 percent to $991.75 and Palladium was also up by 0.44 percent at $1,936.25 per ounce.

Meanwhile, the dollar index, which trails the performance of the U.S dollar against 6 major currencies, surged 0.26 percent at 96.77.

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