Gold Prices Stabilize Near $4,500 Amid Ongoing Iran Conflict

Gold Prices Rebound Amid Escalating Middle East Conflict

Gold prices rose by up to 1.3% to trade above $4,500 an ounce, marking the metal's first weekly gain since the Middle East conflict began. This increase is attributed to dip-buyers who took advantage of lower prices, which have been dragged down by the war over the past month.

Despite the continued rise in oil prices and downturn in equities, investors stepped in to purchase bullion, indicating that the metal's resilience is intact. The entry of Iran-backed Houthis into the conflict and the arrival of more US troops in the region have raised concerns of a prolonged conflict, which could lead central banks to sell gold and hike interest rates to tame inflation.

Gold prices have fallen by approximately 14% since the war began at the end of February, largely due to concerns of a liquidity squeeze in the broader market. However, rate-hike expectations may be moderated by the risk of a sharp slowdown in the economy, which would push Treasury yields lower and reduce the opportunity cost of holding gold.

Read also: Gold and Silver Prices Decline Amid Strengthening Dollar and Inflation Concerns

Key Statistics:

• Spot gold: rose 1.1% to $4,541.21 an ounce at 2:52 p.m. in Singapore
• Silver: climbed 1.3% to $70.70
• Platinum and palladium also advanced
• Bloomberg Dollar Spot Index: was 0.1% lower after adding 0.7% last week