Gold prices saw an increase on Monday, hovering close to the record-high levels of the previous session as tensions in the Middle East continued to escalate, spurring continued safe-haven buying. Amidst these dynamics, the precious metal market remains active and volatile.
In Saudi Arabia, 24-carat gold climbed 0.05 percent to SAR283.65 per gram and SAR8,822.49 per ounce.
Globally, spot gold rose 0.67 percent to $2,360.04 per ounce, as of 6:22 GMT, after hitting an all-time high of $2,431.29 on Friday. Meanwhile, U.S. gold futures gained 0.04 percent, recording $2,375.
Factors propelling gold’s surge
As geopolitical tensions continue to impact global markets and interest rate cut expectations rise for the second half of the year, gold prices consolidate their gains after reaching record highs. With global volatility on the rise, gold is emerging as a safe haven asset that has rallied despite various market dynamics this year.
Gold prices increased to an all-time high of $2,431.29 on Friday, gaining over 14 percent this year. Thus, strong central bank buying and safe-haven inflows amid rising geopolitical tensions have fueled this exponential growth.
Despite a strong U.S. labor market and high inflation, Federal Reserve officials still expect a couple of interest rate cuts this year. Besides, lower interest rates reduce the opportunity cost of holding bullion.
Future outlook
Analysts foresee further upward momentum for gold prices, suggesting that $2,500 is becoming a feasible medium-term target. The precious metal’s remarkable performance in 2024 underscores its attractiveness to investors seeking refuge amidst economic uncertainties and geopolitical tensions.
China’s increased demand for physical gold, driven by efforts to stabilize a depreciating yuan, contributed to rising premiums last week. Meanwhile, in India, record-high prices compelled dealers to offer discounts for a sixth consecutive week. This indicates the complex interplay of global economic forces in the precious metal market.
Read: Saudi CMA’s locally managed assets surge to $232.2 billion in 2023
Other precious metals
While gold prices take center stage, other precious metals are also experiencing notable movements. Spot silver rose by 1.2 percent to $28.18 per ounce, reaching its highest level since early 2021. In contrast, platinum fell by 0.2 percent to $971.95, and palladium lost 0.6 percent to $1,042.95, reflecting varied investor sentiments across different segments of the precious metals market.
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