High demand in the Middle-East drives up the price of gold, silver also rises by 0.5%

Gold prices soared on Thursday, April 18, amidst escalating geopolitical tensions in the Middle East, despite strong economic data in the US. Israel’s pledge to retaliate against Iran’s attacks has added to the appeal of the precious metal. Additionally, the US jobless claims remained steady, but robust economic data and hawkish comments from Federal Reserve officials have led investors to reassess the possibility of rate cuts.

Spot gold rose by 0.8% to $2,378.53 per ounce, touching an all-time high of $2,431.29 recently, while US gold futures increased by 0.2% to $2,392.90. Silver prices also saw a rise of 0.5% to $28.36 per ounce. Despite a slight decline in gold prices in the domestic market, silver prices remained stable.

Analysts suggest that in times of geopolitical uncertainty, investors tend to turn to gold as a safe haven asset. If the conflict in the Middle East escalates further, gold prices could exceed $2,500-$2,600, but a ceasefire could lead to a drop to $2,200. While expectations for a Fed rate cut have lessened and profit-taking may affect gold prices, a sharp decline is unlikely.

Jateen Trivedi, VP Research Analyst at LKP Securities, mentioned, “Gold prices were in the green at 72,650, up by ₹120, as Comex Gold showed strength from lower levels around 2350$. However, significant resistance is observed at the 2400$ mark, limiting further gains.” Trivedi also noted that ongoing tensions in the Middle East may keep gold volatile and any easing in the situation could impact gold prices.

In conclusion, the surge in gold prices amidst geopolitical tensions and economic considerations highlights the metal’s role as a safe haven asset. As investors continue to monitor the situation in the Middle East and Federal Reserve policy changes, the future trajectory of gold prices remains uncertain.