Gold gains on safe-haven demand as Middle East conflict widens
- Spot gold climbed 0.8% to $5,177.26 per ounce
Gold rose on Thursday as the widening Middle East conflict drove investors towards the safe-haven asset, while a softer dollar also lent support to bullion prices.
Spot gold climbed 0.8% to $5,177.26 per ounce by 0249 GMT.
US gold futures for April delivery were up 1% at $5,186.40.
The US dollar eased from a more than three-month high hit earlier this week, making greenback-priced gold less expensive for holders of other currencies.
“Gold benefits from the kind of geopolitical risks that we’ve seen flared up in the last few days. So (prices rose due to) a bit of a function of normalising financial conditions and a US dollar that’s pulling back from highs,” said Kyle Rodda, senior financial market analyst.
The US–Iran war widened sharply on Wednesday after a US submarine sank an Iranian warship off Sri Lanka, killing at least 80 people, and NATO air defences destroyed an Iranian ballistic missile fired towards Turkiye.
The escalation came as the powerful son of Iran’s slain supreme leader emerged as a frontrunner to succeed him, suggesting Tehran was not about to buckle to pressure, five days after the US and Israel launched a military campaign that has killed hundreds and convulsed global markets.
“I think this crisis is something that supports gold prices in the long run. But the uncertainty surrounding the war means we will continue to see heightened volatility until we see signs that we’ve reached peak escalation,” Rodda said.
Bullion, traditionally viewed as a safe-haven asset, has risen about 20% so far this year, notching successive record highs amid heightened global political and economic uncertainty.
Meanwhile, US President Donald Trump officially nominated former Federal Reserve Governor Kevin Warsh to be the U.S. central bank’s next chair, putting the president one step closer to installing a rate-cut-friendly Fed chief.
Markets expect the Fed to keep interest rates steady on March 18, according to CME Group’s FedWatch tool.
Investors now await the weekly U.S. jobless claims data due later in the day and the U.S. employment report for February on Friday.
Spot silver rose 1.3% to $84.50 per ounce. Platinum climbed 1.6% to $2,183.44, while palladium was steady at $1,674.89.
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