Gold continues to trade close to $2,000 an ounce as geopolitical tensions remain high as a result of Israel’s attacks on Gaza.
This safe haven demand among investors has kept the price of gold elevated even though the week has brought confirmation of interest rates remaining higher for longer, with the rate announcements from the Federal Reserve and the Bank of England and the supporting commentary that the battle against inflation is far from over.
Today brings the latest US employment data and another strong set of figures is only going to reinforce the view that the world’s largest economy is in sufficiently good health to support this continued hawkish stance by the Fed. As such, this is likely to keep a lid on the gold price with the threshold of $2,000 an ounce a natural ceiling.
Yet with Israel’s attacks on Hamas and Gaza, the potential trajectory of a long, drawn-out conflict in the Middle East is supportive of haven demand for gold into the foreseeable future. So while the highs of late October may not be threatened, gold is similarly unlikely to fall below $1,950 any time soon.
Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience in writing about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News.
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