Gold rips past $2,400 as geopolitical jitters intensify

Gold prices have soared to record highs on Friday, as investors flock to safe-haven assets due to escalating tensions in the Middle East.

Spot gold (XAU/USD) reached a new peak of $2,414.17 per ounce by 15:30 GMT, driven by fears of a potential attack by Iran on Israel.

Reports suggest Iran could launch a large-scale drone and missile strike, prompting both the US and France to warn citizens against travel in the region. Israel has also heightened its security measures in anticipation of an attack.

The heightened geopolitical uncertainty has outweighed any negative factors for gold, causing its price to surge. Silver has also seen gains, rising over 3.5% to trade at $29.50 per ounce, while the Japanese yen has also strengthened, indicating broader investor anxiety.

There is also talk of inflationary risks, with many accusing the Federal Reserve of fighting a losing battle. While gold is a well-known hedge against inflation in the long term, its short-term performance is less clear-cut. Analysts suggest some traders are buying gold for this reason, seeking protection against a potential rise in inflation.

Investors are also starting to pay increasing attention to gold as a safeguard against concerns about high US debt levels, a topic expected to be a major focus in the run-up to the presidential election this year.

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