Gold rises to record on Middle East tension, US economy concerns

[BENGALURU] Gold rose to a record high above US$3,017 an ounce as an escalation in Middle East tensions underscored its haven appeal, and investors weighed data that fuelled concern the US economy is slowing down. 

Bullion climbed 0.6 per cent as Israel said it launched military strikes on Hamas targets in Gaza, a move that threatens to undermine a shaky truce. Palestinian residents reported multiple airstrikes in several parts of the Gaza Strip.

Traders were also digesting US retail sales data released on Monday, which rose less than forecast in February. While the figures pointed to weak spending on goods, there was no sign of a severe pullback, and the data did little to alter traders’ bets on expectations for Federal Reserve rate cuts. 

Still, companies, investors and economists remain cautious as consumer sentiment sours and signs of financial stress mount, amid risks of escalating trade wars sparked by US President Donald Trump.

The gloomier outlook for both the US and global economy has underscored bullion’s role as a store of value in uncertain times. The metal is up more than 14 per cent so far this year, extending its strong annual advance in 2024. Several major banks have hoisted their price targets for this year higher in recent weeks.

While gold has further room to run, “$3,000 was a strong resistance” in the short term, said Vasu Menon, managing director of investment strategy at Oversea-Chinese Banking Corp. “Even though it’s broken marginally above this, it may not signal a decisive break,” said Menon, who sees bullion rising to US$3,100 an ounce within twelve months.

SEE ALSO

Gold edges higher as geopolitical and economic concerns linger

Spot gold was up 0.6 per cent to US$3,017.34 an ounce as of 2.54 pm in Singapore. The Bloomberg Dollar Spot Index rose 0.1 per cent. Silver, platinum and palladium edged higher. BLOOMBERG