Price Of Gold Hits Four-Week High As Middle East Tensions Grow

The price of gold has risen to its highest level in a month as the Middle East conflict between Israel and Hamas intensifies.

U.S. President Joe Biden’s diplomatic trip to Israel has been overshadowed by an explosion at a Gaza hospital that killed hundreds of people and ratcheted up tensions in the region.

The U.S. has sent two aircraft carriers to the Middle East and put troops on alert as fears grow of a wider war breaking out between Israelis and Palestinians.

The rising tensions are underpinning the price of gold, which has now gained 6% since Hamas attacked Israel about 10 days ago.

Spot gold is currently trading at $1,943.57 U.S. an ounce, near its all-time high of just over $2,000 U.S. per ounce, which was reached in 2020 during the peak of the Covid-19 pandemic.

Gold is viewed as a safe haven asset and investors tend to flock to it during times of geopolitical uncertainty and market volatility.

The price of gold has continued to climb higher even as recently released data showed U.S. retail sales exceeded forecasts and industrial production strengthened last month.

The strong economic data reinforces the case for the U.S. Federal Reserve to keep interest rates higher for longer. Higher rates are typically negative for gold.

Prior to war breaking out between Israel and Hamas, gold had been trading at a seven-month low as higher bond yields exerted downward pressure on the precious metal.

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