Gold price climbs on high safe haven demand

As of this writing, the price of gold has increased by +0.85 to around $2023 per ounce, indicating that investors are still waiting for more information regarding the US Federal Reserve’s future course for interest rates.

High demand for safe haven assets during the Middle East crisis has helped gold. It is noteworthy that as risk aversion has increased, safe-haven demand is represented in the yellow gold. At least nine individuals were killed as Pakistan launched retaliatory airstrikes inside Iran late this week in response to increased military action in the Middle East. The strikes come after Iran attacked Pakistani territory on Tuesday, killing two people. When Iran launched a scheduled air defence drill from its port of Chabahar, close to Pakistan, on Thursday, there was still a chance of an escalation.

Spot gold rose 0.4% to $2,014.59 per ounce by 12:27 p.m. ET (1727 GMT) after hitting a five-week low in the previous session. US gold futures gained 0.5% to $2,016.90.

Geopolitical tensions are unintentionally coordinating efforts to keep gold in the $2,000 range as there is so much uncertainty.

The US on Wednesday put the Yemen-based Houthi rebels back on its list of terrorist groups, as the militants attacked their second U.S.-operated vessel in the Red Sea region this week.

Atlanta Federal Reserve President Raphael Bostic, who recently said inflation could “see-saw” if policymakers cut rates too soon, Bostic also said on Thursday that he was open to reducing US interest rates sooner if there is “convincing” evidence in coming months that inflation is falling faster than he expected.

Traders are pricing in a 57% chance of a March rate cut, according to CME’s Fed Watch tool.

Gold investors are assessing the potential impact of postponed interest rate cuts on prices, even as some US data points could support the metal.

According to recent data, unemployment claims decreased last week to their lowest point since late 2022, indicating that January’s job growth was probably stable.

Palladium increased 2.3% to $936.65, platinum increased 1.9% to $900.72, while spot silver increased 0.5% to $22.64 per ounce.