Gold Rises for a Fifth Day, Markets Become More Defensive!
Gold prices rose for a fifth consecutive day, as escalating conflict in the Middle East rocked global energy markets and prompted investors to seek safe havens. Gold held above $5,340/oz in early Asian trading after ending the previous session up around 0.8%.
This rise occurred as US President Donald Trump asserted that the military offensive against Iran would continue "for as long as necessary." Meanwhile, Tehran reportedly attacked oil and gas infrastructure and threatened shipping routes in the region, adding to market concerns about energy supplies and regional stability.
The surge in energy prices accompanying the conflict also fueled inflation concerns in the United States. As a result, US government bonds weakened, and the market began to consider the Federal Reserve's potential to hold interest rates longer. Market participants are now tending to push back expectations of an interest rate cut, with a new cut more likely around September.
In theory, high interest rates can be a drag on gold because it offers no yield. However, in times of heightened uncertainty, especially when inflation is a recurring concern, gold is often viewed as a stronger store of value, thus maintaining demand.
So far this year, gold has risen by nearly a quarter, supported by geopolitical and trade tensions, as well as concerns about the direction of US monetary policy. Furthermore, the return of the "debasement trade," a shift by investors from bonds and currencies to real assets, has provided additional impetus to gold's rally that has been ongoing for the past few years. Gold briefly reached a record high above $5,595/oz in late January.
In the latest update, spot gold rose around 0.4% to $5,342.99/oz. Silver strengthened 0.6% to $89.87 after a sharp correction the previous day, while platinum and palladium also moved higher. In the forex market, the Bloomberg Dollar Index weakened slightly after strengthening in the previous session, providing additional room for the precious metal to remain strong. (asd)
Source: Newsmaker.id
