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Gold edges higher as Middle East tensions spur demand

Monday,   15-Apr-2024   09:10 AM (IST)

Gold prices edged up on Monday, hovering below a record high hit in the previous session, as escalating tensions in the Middle East lifted bullion’s safe-haven appeal. Spot gold was up 0.3 per cent at US$2,350.59 per ounce, as at 0056 GMT. Bullion hit an all-time high of 2,431.29 on Friday. US gold futures fell 0.3 per cent to US$2,366.40 per ounce. The first direct attack on Israel by arch foe Iran has shaken Israelis and left them fearful that a bigger war is looming. Recent US economic data on the labour market and inflation have caused market expectations for a rate cut from the Fed to be dialled back yet again. Chicago Federal Reserve president Austan Goolsbee said continued high consumer price index readings were concerning, but he remains focused on how the Fed’s targeted personal consumption price expenditures index behaves. Federal Reserve Bank of Boston president Susan Collins is eyeing a couple of interest rate cuts this year amid expectations it could still take some time to get inflation back to targeted levels. Higher interest rates reduce the appeal of holding non-yielding gold. Inflation in the eurozone is different to that in the US, much as ECB president Christine Lagarde insists, but the bloc will still face many of the same headwinds as others, limiting how far price growth can slow. Goldman Sachs hiked its year-end gold price forecast to US$2,700 per ounce from US$2,300, saying the metal’s bull market is not being driven by the usual macro factors. Spot silver rose 0.4 per cent to US$27.98 per ounce, platinum fell 0.1 per cent to US$973.05 and palladium lost 1 per cent at US$1,038.99.