Gold Surges Above $4,000 as Middle East Tensions and Fed Rate Outlook Boost Safe-Haven Demand
Gold prices edged higher on Monday, reclaiming the key psychological level of $4,000 per troy ounce as investors closely monitored rapidly evolving developments in the Middle East while assessing whether rising energy prices could complicate the Federal Reserve's inflation outlook.
As of 09:43 WIB (02:43 GMT), XAU/USD climbed 0.4% to $4,024.72 per troy ounce, while Gold Futures gained 0.5% to $4,029.87. Meanwhile, XAG/USD (Silver) advanced 0.9% to $56.93 per troy ounce, whereas XPT/USD (Platinum) slipped 0.2% to $1,594.30.
Middle East Geopolitical Risks Keep Energy Markets on Edge
Gold remained firmly above the $4,000 mark after ending the previous session down 0.2%, as investors balanced renewed geopolitical risks against concerns that higher oil prices could fuel inflation and reinforce expectations that the Federal Reserve will keep interest rates elevated for a longer period.
Oil prices traded little changed after posting gains over the previous two sessions, despite fresh U.S. strikes on Iranian targets and President Donald Trump's warning that Tehran "will pay" following the deaths of three U.S. soldiers in recent days.
Adding to regional uncertainty, the Iran-backed Houthi movement in Yemen threatened to impose a maritime blockade on Saudi Arabia, prompting the Saudi-led military coalition to strengthen security measures for shipping routes through the Red Sea.
At the same time, markets found some relief after Iran indicated that international mediators were discussing proposals to ease the conflict. Reuters also reported plans for a 10-day ceasefire, helping to ease fears of an immediate escalation in the region.
Now entering its fifth month, the conflict continues to push energy and commodity prices higher, forcing investors to weigh the inflationary impact of rising oil prices against recent signs of slowing economic activity in the United States.