Gold prices rally to near 1-mth high as Middle East tensions worsen
Investing.com-- Gold prices rose sharply on Wednesday, nearing a one-month high as a potential escalation in the Israel-Hamas war drove up safe haven demand, while copper prices also rose tracking a positive reading on China’s economy.
A blast at a Gaza hospital, which reportedly killed hundreds of Palestinians, marked a potential escalation in the conflict, especially as Egyptian and Palestinian leaders called off a summit with U.S. President Joe Biden following the attack.
The move pushed up concerns that the Israel-Hamas conflict could draw in other Arab countries, causing the war to spill over into the broader Middle East region.
This notion ramped up investor demand for safe havens, with gold seeing strong inflows after the move.
Gold’s most-active futures contract on New York’s Comex, December, settled up $32.60, or 1.6%, at $1,968.30 per ounce.
The spot price of gold, more closely watched by some traders than futures, was at $1,950.45, up $27.29, or 1.4%.
Both instruments were close to a one-month high.
Rising concerns over an escalation in the Israel-Hamas war provided a major boost to gold prices over the past week, as demand for conventional safe havens increased. Gold was sitting on a 5% gain in the prior week.
But this demand somewhat cooled in recent sessions, especially amid resurgent fears of higher U.S. interest rates. Retail sales data released overnight pushed up fears of sticky inflation, which in turn could attract a more hawkish stance from the Federal Reserve.
To that end, focus this week is on a string of U.S. economic indicators and Fed officials, most notably an address by Chair Jerome Powell on Thursday. Any hawkish signals from Powell, considering the recent uptick in inflation, will be in
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