Gold rises on the back of geopolitical tension enhancing safe haven appeal

Gold prices rebounded on Thursday, recouping losses from the previous session, buoyed by geopolitical tensions that spurred demand for the precious metal as a safe haven.

In spot transactions, gold edged up by 0.1 percent to $2,334.64 per ounce as of 0809 GMT. The yellow metal had seen record highs for eight consecutive trading sessions until Tuesday.

Meanwhile, US gold futures rose by 0.2 percent to $2,352.40.

Gold has witnessed a 14 percent surge year-to-date, driven by robust purchases from central banks and heightened demand for safe-haven assets amid ongoing geopolitical uncertainties. Additionally, funds tracking market trends have contributed to the metal’s upward trajectory.

Last week’s higher-than-anticipated inflation data and a robust labor market report, indicating stronger-than-expected job growth, have raised uncertainties regarding the timing and magnitude of potential interest rate cuts this year. Elevated interest rates typically diminish the appeal of gold, given its non-yielding nature.

In contrast, silver dipped by 0.2 percent in spot transactions to $27.93 per ounce after hitting its highest level since June 2021 on Wednesday. Meanwhile, platinum surged by 1.3 percent to $972.60, and palladium edged up by 0.5 percent to $1,056.31.