During Thursday’s Asian session, the price of gold rebounded, hovering around $2,370 per troy ounce as geopolitical tensions in the Middle East spurred demand for the safe-haven yellow metal. Investors exercised caution amidst escalating concerns about potential conflict in the region.
Reports from Reuters highlighted remarks by Jordan’s Foreign Minister Ayman Safadi, who warned that Israeli retaliation against Iranian strikes could escalate tensions and lead to a devastating regional conflict. Additionally, Israel’s Air Force announced targeted strikes on Hezbollah infrastructure in eastern Lebanon, further fueling apprehensions about escalating hostilities.
Prime Minister Benjamin Netanyahu of Israel emphasized the nation’s determination to defend itself amid mounting tensions, while Western countries urged restraint in response to Iran’s actions.
Meanwhile, the US Dollar Index (DXY) experienced a decline, influenced by subdued US Treasury yields. This correction in the US Dollar’s strength renders gold less expensive for investors using other currencies, bolstering demand for the precious metal.
Federal Reserve Bank of Cleveland President Loretta Mester acknowledged the surpassing of inflation expectations, signaling a potential shift in monetary policy. Fed Chair Jerome Powell echoed this sentiment, noting limited progress in inflation and suggesting a cautious approach to interest rate decisions. This hawkish stance could potentially dampen demand for non-yielding assets like gold.
As geopolitical tensions remain elevated and monetary policy considerations evolve, investors continue to monitor developments closely for further insights into gold’s trajectory in the global market.
