Gold prices jumped to the highest level in 4 weeks after the escalation of the conflict in the Middle East led to increased demand for safe havens, with hopes for a diplomatic solution deteriorating after a deadly explosion in Gaza.
It seems that US President Joe Biden's visit to Israel and Jordan, scheduled for Wednesday, will not bear fruit even before he leaves the United States, after the loud explosion that occurred in a hospital in Gaza, which led to the killing of hundreds and the withdrawal of Arab leaders from the scheduled meeting with Biden.
Support gold prices
At the same time, the threat of an escalation in the conflict has supported gold prices, which have risen by approximately 6% since Hamas' surprise attack on Israel earlier this month.
Gold is rising as geopolitical tensions enhance its safe-haven lustre
The price of the precious metal was at its lowest levels in 7 months before the outbreak of the crisis, amid a sharp selling wave of US Treasury bonds, which hurt sales of assets that do not provide returns significantly.
Gold's current jump also came despite US retail sales exceeding all expectations, and industrial production improving last month. These data reinforced the Federal Reserve's motives for keeping interest rates at high levels for a longer period. Interest rates and gold are usually inversely related in traditional times.
The price of gold in spot trading rose by 0.8% to $1,937.60 per ounce at 9:42 a.m. Singapore time, while the Bloomberg Dollar Spot Index stabilized, and the prices of silver, platinum, and palladium also rose.
