Gold Rises as Middle East Wars Heat Up and Dollar Weakens!
Gold prices strengthened as the US dollar weakened and the escalation of war in the Middle East entered its sixth day with no signs of abating. Bullion briefly rose as much as 0.9% to reach $5,180 per ounce, extending its gain of around 1% in the previous session. Demand for safe haven assets strengthened again as US and Israeli military operations continued, while Iran responded with missile launches at several countries in the region.
Risk-off sentiment intensified following reports of attacks on energy infrastructure and disruptions to the strategic Strait of Hormuz, raising concerns about surging energy prices and risks to global supply chains. President Donald Trump expressed confidence in the US military campaign, including claims that the US sank an Iranian warship in international waters. Meanwhile, Tehran denied reports that its Intelligence Ministry had contacted Washington to negotiate an end to the conflict.
Beyond geopolitical factors, the market is also weighing the risk of a renewed trade war as Washington prepares to raise import tariffs. US Treasury Secretary Scott Bessent said Trump's plan to raise universal tariffs from 10% to 15% could potentially take effect this week, with the European Union expected to be exempt. The combination of geopolitical tensions, an energy surge, and tariff threats has the potential to create a "double whammy" for global trade—conditions that typically support gold.
Gold's gains were also driven by a weakening dollar, which recorded its biggest drop in about three weeks, making gold cheaper for non-dollar buyers. The dollar index fell about 0.4% in the past two days, although it is still up nearly 1% so far this week. Previously, a strengthening dollar and a broad sell-off in stock markets had triggered a sharp decline in the precious metal on Tuesday, before the market stabilized.
Year-to-date, gold has risen about 20% this year, supported by geopolitical and trade tensions and concerns about the Fed's independence. Prices even reached a record high above $5,595 per ounce in late January. In morning Asian trading, spot gold rose 0.7% to $5,176.83 per ounce (9:23 a.m. Singapore time), while silver rose 1.5% to $84.79, with platinum and palladium also strengthening. (asd)
Source: Newsmaker.id
