Escalating geopolitical risks in the Middle East have ignited a surge in gold prices, propelling the precious metal past the $2,400 per ounce mark on Friday. Multiple media reports emerged claiming Israeli missile strikes across several Iranian cities, including the nuclear facility hub of Isfahan, in retaliation for last weekend’s drone attack on Israel.
Although Iranian state media swiftly denied any foreign aggression, the unconfirmed reports were sufficient to rattle investor nerves and trigger a broad flight to safety. The yellow metal, renowned as a traditional safe-haven asset, rallied in Asian trading hours, with spot prices (XAU/USD) soaring as high as $2,417.70 an ounce before paring some gains to trade at $2,383.09 by 06:20 GMT.
The purported Israeli strikes have raised tensions between the longstanding foes, fuelling fears of a potential wider conflict that could engulf the volatile region. While Iran had previously warned Israel against targeting its nuclear sites, threatening to reconsider its nuclear program, the latest events have heightened concerns.
Gold’s sharp rise highlights its appeal as a safe investment during periods of heightened uncertainty and turmoil. Despite warnings about prolonged high-interest rates, which typically reduce demand for non-yielding assets like gold, the metal’s safe-haven status has proven resilient amid the escalating geopolitical risks.
The situation remains highly volatile, with the potential for further price swings as events unfold in the Middle East.
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