Gold as a safe haven grows as worries about the Middle East grow

Gold as a safe haven grows as worries about the Middle East grow

Gold as a safe haven grows as worries about the Middle East grow

By 0403 GMT, spot gold was up 0.4% at $2,025.99 an ounce. At $2,025.20, US gold futures also increased by 0.4%.

As tensions in the Middle East increased, gold's attractiveness as a safe haven diminished on Monday. However, trading activity was muted as traders awaited US Federal Reserve Chairman JerryPowell's remarks on the remarkable rate trend was something I was eager to hear about.

By 0403 GMT, spot gold was up 0.4% at $2,025.99 an ounce. At $2,025.20, US gold futures also increased by 0.4%.

According to Tim Waterer, chief market analyst at KCM Trade, investors are still drawn to gold as a safe haven investment because of the continued turmoil in the Middle East.

Following the deaths of three US military personnel in an unmanned aerial drone strike on US soldiers stationed in northeastern Jordan, close to the Syrian border, investors are cautious due to increased geopolitical risks.

Wetter said that the impending Fed meeting has limited the short-term gain and that news of China mandating the liquidation of Evergrande is negatively impacting risk sentiment, which is also helping gold.

A secure store of value in turbulent political and economic times is gold.

At its policy meeting on January 30-31, the US Fed is expected by the market to maintain unchanged interest rates, but Powell's comments will be the main point of interest.

The Federal Reserve began lowering interest rates this year after data released on Friday revealed that US prices increased little in December, maintaining the annual growth in inflation below 3% for the third straight month.

According to LSEG's interest rate probability software IRPR, traders are now banking on six quarter-point rate cuts in the US for 2024, up from five cuts only one week before.

Having bullion has a lower opportunity cost when interest rates are low.

Spot silver increased 0.5% to $22.91 an ounce, while palladium decreased 0.3% to $952.33 and platinum down 0.2% to $911.18.