Gold prices rose in early trading on Monday, as escalating tensions in the Middle East led to increased demand for the precious metal as a safe haven amid limited transactions as investors awaited statements by the Chairman of the Federal Reserve (US Central Bank) to clarify the matter regarding interest rates.
Tim Water, chief market analyst at KCM Trade, said that the instability in the Middle East keeps investors interested in gold as a source of safe haven.
Investors are concerned about the increasing geopolitical risks after three American soldiers were killed in a drone attack on American forces stationed in northeastern Jordan near the Syrian border.
Water said that the news regarding the order issued to the Chinese company Evergrande to liquidate affects the appetite for risk, adding that the immediate upward trend is currently halted given that the US central bank meeting is imminent.
Markets expect the US Central Bank to keep interest rates unchanged at its meeting scheduled for January 30 and 31.
Change in prices
Gold rose in spot transactions by 0.4 percent to $2,025.99 per ounce by (0403 GMT).
US gold futures also rose 0.4 percent to $2,025.20.
As for other precious metals, silver rose in spot transactions by 0.5 percent to $22.91 per ounce. Platinum fell by 0.2 percent to $911.18, and palladium fell by 0.3 percent to $952.33 per ounce.
