NEW YORK: Gold rose for a second straight session on Monday as safe-haven demand picked up, although prices were headed for a monthly decline as the Middle East conflict sparked inflation concerns and expectations of higher global interest rates.
Spot gold rose 1.6percent to USD4,564.00 per ounce by 8:51 a.m. ET (1251 GMT) after hitting its lowest level since November early last week. US gold futures for April delivery gained 1.5percent to USD4,594.00.
“The war is still running hot and there’s no resolution in sight and that’s pushing gold prices higher due to safe-haven demand… Market focus in the near-term will be on the war, crude oil prices, bond yields, and the US dollar index,” said Jim Wyckoff, senior analyst at Kitco Metals.
Iran fired waves of missiles at Israel and vowed to “punish the aggressor” as Israeli forces pounded Tehran, while oil prices rose after Yemen’s Houthis entered the conflict.
Gold has fallen more than 13percent so far in March, putting the metal on track for its worst monthly performance since 2008, as surging energy prices have heightened inflation concerns, prompting markets to reassess their interest rate expectations.
Gold is often used as a hedge against inflation and geopolitical uncertainty but does not yield interest, making it less attractive when interest rates remain high.
Investors will be watching remarks from US Federal Reserve Chair Jerome Powell and New York Fed President John Williams later on Monday for further policy signals.
“I think Powell will walk a fine line and try to be neutral. But in case his comments happen to be hawkish, gold could come under pressure, and if dovish, then prices will rally,” said Wyckoff. A series of economic data is due this week, including US job openings, retail sales, the ADP employment report and non-farm payrolls.
Among other metals, spot silver rose 2.5percent to USD71.36 per ounce. Spot platinum gained 3percent to USD1,919.23 and palladium climbed 4.3percent to USD1,436.56.