Gold prices jumped to their highest levels in a month on Wednesday, after the bombing of a Gaza hospital raised concerns about the escalation of the regional conflict, and safe haven assets remain the preferred option to hedge against the risks of war.
The spot price of gold rose by 0.8% to 1,938.19 dollars per ounce, at 05:01 GMT, after recording its highest levels since the twentieth of September early in the session. Gold futures also rose by 0.8% to 1,950.90 dollars.
Kelvin Wong, market analyst at “OANDA”, said that gold benefited from the combination of geopolitical risk premium against the background of fears of prolonged conflict, momentum after breaking the main technical level above and the risks of stagflation due to high oil prices.
Hundreds were killed in Israel’s bombing of the Baptist Hospital in Gaza on Tuesday, sparking protests in the West Bank and across the Middle East.
“Safe haven flows amid geopolitical tensions in the Middle East are still the main driver of gold prices,” said Yap Jun Rong, market strategist for DAG.
He added that the risk of escalation of the conflict may be supportive for prices at the moment, but the level of 1,945 USD may prove to be a decisive resistance level to exceed.
“Reuters” pointed out that gold prices have jumped by about 100 dollars since the outbreak of the conflict, although the strength of recent economic data enhances the likelihood of raising interest rates for a longer period, which throws its weight on the yellow metal, which does not carry interest.
