Gold prices climbed to a fresh record on Friday as demand for the safe-haven asset was spurred by simmering Middle East tensions.
Bullion broke the $2,400-an-ounce mark for the first time on Friday morning, climbing as much as 1.2% to $2,400.67. Thai selling prices reached 41,350 baht per baht-weight (15.2 grammes), according to the Thai Gold Traders Association.
The United States and its allies believe a major missile attack by Iran or its proxies is imminent in retaliation for an Israeli strike on the Iranian embassy compound in Syria.
“Gold prices are up again, as more investors view it as a better hedge against geopolitical risk than government bonds due to US inflation concerns,” Mohamed El-Erian, the president of Queens College in Cambridge and a Bloomberg Opinion columnist, wrote in a post on X.
The precious metal has powered higher this year, dragging silver along with it, as central banks including China’s stepped up gold purchases. In addition, traders have also been assessing the scope for interest-rate cuts from the US Federal Reserve over 2024, though still-strong US inflation has muddied that outlook.
Spot gold was 0.9% higher at $2,393.73 an ounce in London, with the metal on track for a fourth weekly advance, the longest such run since early 2023.
Platinum and palladium also advanced, even as the Bloomberg Dollar Spot Index traded near the highest level since November. A stronger US currency is typically a headwind for commodities priced in the greenback as it can reduce interest from overseas buyers.
“Geopolitical risk is the fulcrum here,” said Rhona O’Connell, head of market analysis at StoneX Financial. In a year with more than 50 local and national elections, ongoing tensions in the Middle East add “further fuel to the fire”, she said.