Gold hit yet another record high on Tuesday as traders snapped up the safe-haven asset amid growth Tensions in Western Asialargely ignoring a stronger dollar and tempering bets on US rate cuts. Spot gold rose 0.9% to $2,269 per ounce, after reaching an all-time high of $2,277.
Global oil reference Brent it also rose above $89 per barrel for the first time since October, as oil supplies faced new threats from Ukrainian attacks on Russian energy facilities and escalating conflicts in West Asia.
Reaching an all-time high, gold prices in India rose to Rs 68,500 per 10 grams in Mumbai. In the previous session, the precious metal closed at Rs 68,450 per 10 grams. Silver prices rose from Rs 800 to Rs 75,500 per kg. In the previous session, prices had settled at Rs 74,700 per kg.
“We are seeing some safe-haven demand flowing into gold, which is related to the Israeli attacks on the Iranian embassy in Syria,” said Daniel Ghali, commodities strategist at TD Securities. The latest rise in gold prices is probably also associated with short covering by family offices and proprietary trading shops, Ghali added.
Iran has vowed revenge against Israel for an airstrike on the Iranian embassy compound in Damascus. Saxo Bank's Ole Hansen said an underlying bid from central and retail banks was being followed by momentum-riding speculators who extended their already large long positions following gold's break above $2,200. The combination of tailwinds has seen gold rise nearly 10% so far this year.