Gold prices surged to unprecedented levels on Friday, driven by escalating geopolitical tensions that spurred demand for the safe-haven metal. Despite robust economic data, bullion’s allure remained unscathed.
Spot gold climbed by 0.6 percent to $2,386.38 per ounce as of 0111 GMT, reaching a record high of $2,389.29 earlier in the session. Meanwhile, US gold futures saw a notable gain of 1.3 percent, reaching $2,403.90 per ounce.
Despite the surge in gold prices, Federal Reserve officials are increasingly voicing reluctance to rush into interest rate cuts, citing concerns over persistently high US inflation. The growing sentiment is reflective of diminishing expectations regarding the extent of potential policy easing by the Federal Reserve, as consecutive strong economic reports suggest the risk of inflation resurgence if borrowing costs are lowered prematurely.
It’s worth noting that higher interest rates typically diminish the appeal of holding non-yielding assets like gold. However, in the current climate of geopolitical uncertainty, gold’s status as a safe-haven asset remains paramount, sustaining its attractiveness to investors despite economic headwinds.
