Gold prices have reached an all-time high, driven by geopolitical tensions and a surge in demand for the precious metal
Gold prices hit a record high in Asian trading on Monday, driven by heightened geopolitical tensions in the Middle East, which increased the demand for safe-haven assets. Additionally, a broader rally in metal markets contributed to the surge in gold prices.
Spot gold climbed nearly 1% to a record $2,440.56 per ounce, while June gold futures reached a record $2,444.55 per ounce.
Concerns about stability in the Middle East intensified following a helicopter crash involving Iranian President Ebrahim Raisi and his foreign minister on Sunday due to adverse weather conditions. According to media reports and Iranian officials quoted by Reuters, their lives were at risk, triggering rescue efforts.
Raisi, considered a potential future supreme leader of Iran and known for his hardline stance on domestic protests and morality laws, added to the geopolitical uncertainty. Gold prices had previously surged to record highs in April over fears of a war between Israel and Iran, which did not materialize. However, the potential for further instability in the region is now driving gold prices up once again. Ongoing Israeli strikes on Gaza are also maintaining regional tensions.
In addition to Middle East concerns, increased military action between Russia and Ukraine over the weekend further supported the demand for safe-haven assets. Both nations launched strikes against each other, contributing to the geopolitical uncertainty.
Other precious metals also saw gains on Monday. Platinum futures rose 0.2% to $1,096.50 per ounce, while silver futures jumped 3.2% to an over 11-year high of $32.285 per ounce. Broader metal prices were supported by growing expectations of a U.S. interest rate cut this year, along with anticipated increased demand and tighter supplies, especially in industrial metals.
This week, market focus will be on signals from the Federal Reserve, following soft U.S. inflation readings for April, which have raised hopes that the central bank may begin cutting rates as early as September.
