Approaching historical highs, gold is back!
Growing concerns over the Middle East conflict combined with the decline in US bond yields have made gold a popular trade from any perspective. Currently, the price of gold has risen to $2471 per ounce, just a step away from the historical high set in mid-July
Concerns over the escalation of the Middle East conflict combined with a decline in US bond yields have pushed the price of gold to near historic highs.
On Monday afternoon, the price of gold surged by nearly 1.8%, rising by $43.56 per ounce to reach $2471, marking its best performance in 10 days and approaching the historical high of $2482 set in mid-July. Silver also saw some gains, rising by $0.64 per ounce, trading just below $28, with an increase of over 2%.
The decline in US Treasury yields and the escalation of the Middle East conflict have both driven the demand for safe-haven assets like precious metals.
According to CCTV News, Israel continued its attacks in the southern Gaza Strip on Monday, with Hamas calling for ceasefire negotiations in Gaza to implement previous negotiation results and compel Israel to act, rather than engage in more talks or propose new plans. Earlier, Israel intercepted rockets launched from inside Lebanon, indicating that the conflict may spread to another region.
The Middle East conflict has increased the attractiveness of gold as a hedge against geopolitical uncertainties, as stated in a report by TD Securities:
Gold is now seen as a popular trade from any angle. The market is generally bullish, but macro funds' positions may have reached their limits without an imminent recession.
This week, gold traders will be looking for market catalysts, with the US set to release the PPI Price Index on Tuesday and the CPI Price Index on Wednesday. The market expects the Fed to cut rates at its meeting on September 18th, with differing views on whether the rate cut will be 25 basis points or 50 basis points, according to the CME FedWatch tool