Gold prices climbed above $2,400 an ounce on Wednesday, buoyed by a weakening dollar and heightened geopolitical concerns in the Middle East. The precious metal’s rally comes as investors await the Federal Reserve’s latest decision on interest rates.
Spot gold (XAU/USD) rose 0.3% to $2,419.11 an ounce by 07:00 GMT, breaking through the psychologically significant $2,400 barrier. The surge was partly attributed to a softer dollar, as traders positioned themselves ahead of the Fed’s announcement.
While the central bank is expected to maintain current rates, market participants are keenly focused on potential signals regarding future cuts. Recent softer inflation data and dovish remarks from Fed officials have fuelled expectations of a 25 basis point reduction in September.
Adding to gold’s appeal as a safe-haven asset were reports of Hamas leader Ismail Haniyeh’s death in an Israeli strike in Tehran. This development threatens to escalate the ongoing Israel-Hamas conflict, now in its ninth month with no ceasefire in sight.
The incident also raises concerns about a potential wider conflict in the Middle East, given already strained relations between Iran and Israel following recent missile exchanges. Israel’s strikes against the Iran-backed Hezbollah group in Lebanon earlier this week further compound regional tensions.
As geopolitical uncertainties persist and monetary policy remains in focus, gold continues to attract investors seeking stability in turbulent times.
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