Gold Extends Advance After Israel Attacks Iran’s Nuclear Program
Gold climbed alongside other financial assets after Israel conducted airstrikes targeting Iran’s nuclear sites, raising concerns over an escalation of hostilities in the Middle East.
Bullion advanced as much as 1.4% following news of the attacks. Explosions were heard in Tehran, according to videos and local media, and Israeli Defense Minister Israel Katz said the nation was anticipating a retaliatory strike from Iran. The US said it was “not involved” in the operation.
The precious metal is trading around $70 below an all-time record of $3,500.10 an ounce reached in April.
“The risk of Iranian retaliation, including threats to US bases, adds to the uncertainty and supports haven flows,” said Charu Chanana, a strategist at Saxo Capital Markets Pte. “With markets already on edge and risk sentiment deteriorating, gold is likely to stay bid as a hedge — not just against conflict risk, but also a possible spillover into inflation and volatility.”
The move higher extended a two-day gain, after weak US inflation and jobs data fueled bets that the Federal Reserve will lower interest rates later this year. A report on Thursday showed US producer price inflation remained muted in May, while a separate print showed recurring applications for unemployment benefits rose to the highest since the end of 2021.
Gold has rallied 30% this year, with investors increasingly seeking safety in the haven asset due to concerns over President Donald Trump’s aggressive trade policies and geopolitical tensions, including in Ukraine. Strong demand from central banks and sovereign institutions has also supported prices.
Israel’s attack on Iran followed repeated warnings from Prime Minister Benjamin Netanyahu about striking the OPEC producer and crippling its nuclear program. US and Iranian negotiators are scheduled to hold a round of talks in Oman on Sunday about Tehran’s atomic program, but Trump said this week that he’s less confident about the chances of a deal.
Spot gold was 1.1% higher at $3,424.79 an ounce as of 9:56 a.m. in Singapore. The Bloomberg Dollar Spot Index rose 0.1%. Silver climbed, and platinum and palladium dropped.
Source : Bloomberg
