Spot gold jumped 1.2% to $1,853.79 per ounce by 0621 GMT, having hit its highest level in a week. U.S. gold futures climbed 1.2% to $1,867.80.
Gold prices climbed more than 1% on Monday as dramatic clashes between Israeli and Hamas forces over the weekend raised the risk of a wider Middle East conflict and spurred a rush to safe-haven investments like bullion.
Israel pounded the Palestinian enclave of Gaza on Sunday, killing hundreds of people in retaliation for one of the bloodiest attacks in its history when Islamist group Hamas rampaged through Israeli towns on Saturday.
Spot gold jumped 1.2% to $1,853.79 per ounce by 0621 GMT, having hit its highest level in a week. U.S. gold futures climbed 1.2% to $1,867.80.
“Gold has regained its safe-haven status following the geopolitical events over the weekend,” City Index Senior Analyst Matt Simpson said.
“We see the potential for gold to head for $1,880, but unless we see bond yields move materially lower, I doubt it can break $1,900 any time soon.”
The spiralling violence threatens to start a major new war in the Middle East, sending oil prices higher and boosting the demand for safe-haven assets like Treasuries, the dollar and the Japanese yen along with gold.
Gold rebounded from seven-month lows hit on Friday, but its upside remained capped by strong U.S. economic data that has bolstered the view that the Federal Reserve is unlikely to end its monetary policy tightening cycle in the near term.
Last week, data showed that U.S. employment increased by the most in eight months in September, pointing to persistent labour market strength. A hot inflation print later in the week could pave the way for another U.S. interest rate hike this year.
Higher U.S. rates raise the opportunity cost of holding gold, which yields no interest. Investors are also focused on the minutes of the U.S. central bank’s September meeting due on Wednesday.
Among other metals, spot silver gained 1.3% to $21.87 per ounce, platinum advanced 1.3% to $888.45 and palladium rose 0.7% to $1,165.75.
Source:financialexpress.com