Gold Price News: Gold Hits All-Time High as Mid-East Tensions Soar

Gold prices powered up to another all-time high on Tuesday, driven by ongoing economic and geopolitical uncertainty and a weaker US dollar.

Prices rallied as high as $3,038 an ounce on Tuesday – their highest ever intraday price – up from around $3,000 an ounce in late trades on Monday.

Geopolitical tensions support safe havens

Gold’s safe-haven value continues to attract buyers due to the current climate of geopolitical and economic uncertainty. Israel launched fresh strikes against what it said were Hamas targets in Gaza overnight which reportedly killed more than 400 people. Talks to extend a ceasefire which started in January have not yet found agreement. Meanwhile, Germany has moved to exempt military spending from rules that aim to limit the country’s debt, in a sign that Europe is beginning to ramp up its defence capability in the context of Russia’s February 2022 invasion of Ukraine and signs of declining US interest in providing military assistance to Europe.

The ongoing conflicts in the Middle East and Europe represent risk elements that support precious metals prices, and this factor is only compounded by economic uncertainties linked to recent US trade policies.

Weaker US dollar lifts gold

The US dollar fell in value against other major currencies in the first half of March and continued to trade at fresh four-month lows against the euro on Tuesday. A weaker dollar tends to support dollar-denominated gold prices as it makes the precious metal more affordable for buyers in other currencies.

Upcoming data/events

The markets were looking ahead to the US Fed’s interest rate decision on Wednesday – with the central bank widely expected to keep rates on hold. However, eyes will be on the FOMC economic projections and press conference on Wednesday, amid expectations that the central bank will resume interest rate cuts later this year, potentially in June, following three cuts in 2024. The Bank of England is also set to make an interest rate decision on Thursday, widely tipped to be a ‘hold’ at 4.5% for now.