The price of gold climbed to its highest level since May today and is approaching the psychologically important $2,000 per troy ounce (oz; 31.1 grams). It is pushed up by fears of further escalation of the conflict in the Middle East. Investors typically use gold as a safe haven during times of political and economic uncertainty.
Feeling of safety
Shortly after 17:00 CEST, the price of gold, according to Bloomberg data, showed an increase of almost one percent to 1993 USD/oz. It has gained roughly three percent for the entire week and has already risen by nearly $160 per ounce since the beginning of the conflict between the Palestinian movement Hamas and Israel, Reuters reported.
“People rushed to gold and found a sense of security in a time of geopolitical risks. If there is an escalation of the conflict in the Middle East, the price of gold will cross the $2,000 mark,” said Phillip Streible, an analyst at Blue Line Futures.
Conflict
The strong rise in the price of gold after the outbreak of the conflict between Israel and Hamas was not prevented even by the expectation that interest rates in the United States would remain at a higher level for a longer period of time. High interest rates are bad for the price of gold because they increase its disadvantage against interest-bearing investments such as bonds.
source: ČTK
