Gold shines as investors hedge amid turmoil in the Middle East

Gold prices rose more than one per cent on Monday, as the outbreak of violent clashes between Israeli forces and the Palestinian Islamic Resistance Movement (Hamas) over the weekend increased the risk of a broader conflict in the Middle East and stimulated interest in investing in safe havens such as the yellow metal.

Spot gold prices jumped 1.2 percent to $1,853.79 per ounce by 0621 GMT, recording the highest weekly level. Likewise, US gold futures jumped 1.2 percent to $1,867.80.

The escalating violence threatens to unleash a major new war in the Middle East, leading to higher oil prices and boosting demand for safe-haven assets such as Treasury bonds, the dollar and the Japanese yen, and gold.

As for other precious metals, silver rose in spot transactions by 1.3 percent to $21.87 per ounce. Platinum also increased 1.3 percent to $888.45, and palladium rose 0.7 percent to $1,165.75.