Gold breached the psychological $2,000 mark for the first time since May on concerns surrounding the Middle East conflict for a longer-term war involving other parties to the conflict, most notably Iran.
Gold rose as much as 1.2 percent to $2006 after the Israeli army said it was expanding its ground operation in the Gaza Strip.
The new level puts the precious metal on track for its biggest monthly gain since July 2020.
Then prices reached an all-time high of $2,075.47 due to the covid pandemic.
Bullion has jumped about 9 percent since Hamas attacked Israel, recovering from a seven-month low as demand for safe-haven assets increased, Bloomberg said.
The initial price move was amplified as many investors who had bet on further declines were caught off guard by the outbreak of war, forcing them to quickly cover their short positions.
“We saw a spike at the start of the war, now there’s a new one because of the increasing risk that this will turn into a broader conflict,” said Bart Melek, managing director and global head of commodity strategy at TD Bank.
“We have a situation where we now see that oil may rise due to broader geopolitical tensions, while the Federal Reserve may be reluctant to counter the supply shock.” So that reality, along with gold hedging, probably led to some short covering that contributed to the spike,” he added.
Along with metals, oil futures contracts also rose most noticeably – up to $90 per barrel of Brent and up to $85 per barrel of WTI. For the last day of the exchange, the growth was over two percent.
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2023-10-28 14:26:00
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