Gold price hits historic high

The rally has been attributed to rising tensions in the Middle East that have spurred safe-haven demand.

The price of gold reached an all-time high on Friday, soaring above $2,400 per ounce as a global safe-haven rush continues.

Spot gold prices rose 2.4% to a record high of $2,431.52 per ounce before pairing some gains. Prices were up 4% for the week and 16% so far this year, exceeding the 13% advance registered for all of 2023.

Analysts attribute the rally to investor demand for safe-haven assets amid global uncertainty and rising geopolitical tensions in the Middle East.

US officials claimed on Friday that Iran could launch a massive strike on Israel within the next 24 to 48 hours. Tehran has been threatening a harsh response since Israel killed two senior Iranian generals in an airstrike earlier this month.

“The positive factors for gold outweigh the negative. The heightened tensions in the Middle East are the main driver for gold’s recent surge,” Chris Gaffney, president of world markets at EverBank, was quoted as saying by Reuters.

Head of market analysis at StoneX Financial Ltd., Rhona O’Connell, also said that “geopolitical risk is the fulcrum here,” and that in a year with more than 50 local and national elections, continuing tensions in the Middle East are adding “further fuel to the fire.”

Some experts indicated that continued strong buying from China has also underpinned prices.

Investors traditionally turn to gold in times of market uncertainty to hedge risks and as a store of value. For thousands of years, bullion has been seen as a safe haven during periods of economic instability, stock market crises, military conflicts, and pandemics.

Other precious metals were also on the rise, with silver going up 4% to $29.60 per ounce, its highest price since early 2021. Palladium went up 2.7% to $1,075 and platinum rose above the key psychological level of $1,000 per ounce to its highest in nearly four months.

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