The global gold price rose by more than 2% due to increased safe-haven demand amid escalating geopolitical risks and falling oil prices. The cash price of gold has now reached $4,370, reflecting a 2.4% increase compared to yesterday.
Upward Trend in Prices
Gold futures in the United States also increased by 0.54% to $4,410. Meanwhile, the price of silver has risen by more than 4.5%, reaching $66. The prices of platinum and palladium have also appreciated following this increase.
Market analysts believe that the drop in oil prices to a one-week low and the decrease in the U.S. dollar index from its highest level in the past seven weeks are factors contributing to the rise in gold prices. They pointed to a strong inverse relationship between gold prices and energy due to inflationary pressures and added that the decline in energy prices has eased pressures on the gold market.
Challenges Ahead for Gold
Experts also noted the correction of extreme reactions in the yield of 10-year U.S. Treasury bonds, which supported gold, although they cautioned that high inflation and interest rates may limit short-term upside potential. Investors are also assessing the U.S. Federal Reserve's decision on Wednesday to raise interest rates to a range of 3.75% to 4% and its policy signals for the upcoming period.
The Bank of England has kept its rates steady in light of the global interest rate situation, while the Bank of Japan is expected to raise rates to a 31-year high on Friday, signaling an increase in borrowing costs.
Meanwhile, the price of Brent crude oil futures has decreased by 2.8% to $102.86 per barrel, and West Texas Intermediate crude oil is trading at $100.62 per barrel, down 1.77%.
