Gold prices edged up in Thursday's trading session as conflicts in the Middle East continued to escalate, boosting demand for safe-haven assets. However, the upward momentum of the precious metal was somewhat curbed by the recovery of the USD.
Spot gold rose 0.4% to $5,162.67/ounce in this afternoon's trading session. US gold futures for April delivery rose 0.5% to $5,161.30/ounce.
Mr. Kyle Rodda, senior financial market analyst at Capital. com, said that the current crisis may support gold prices in the long term. However, the uncertainty surrounding the diễn biến of the war may cause the market to continue to witness strong fluctuations until signs of tension reach a peak.
The USD recovered after falling in the previous session, making gold more expensive for holders of other currencies.
Conflict in the Middle East escalated sharply on Wednesday after a US submarine sank an Iranian warship off Sri Lanka, killing at least 80 people, while NATO's air defense system shot down an Iranian ballistic missile launched towards Turkey.
This development occurred when the son of Iran's Supreme Leader Ayatollah Ali Khamenei, who had just been killed, emerged as the top candidate to succeed him. This shows that Tehran shows no signs of compromising pressure, five days after the US and Israel launched a military campaign that killed hundreds of people and shook global markets.
Gold, which is considered a traditional safe haven asset, has increased by about 20% since the beginning of the year and continuously set new records amid rising global political and economic instability.
Meanwhile, US President Donald Trump has officially nominated former US Federal Reserve (Fed) Governor Kevin Warsh as the next Chairman of the US Central Bank, bringing him closer to appointing a Fed leader who tends to support interest rate cuts.
According to CME Group's FedWatch tool, the market currently expects the Fed to keep interest rates unchanged in the meeting on March 18.
Investors are currently awaiting weekly US jobless claims data, expected to be released on the same day, along with the February jobs report to be released on Friday.
On the other precious metal market, spot silver fell 1.5% to 82.20 USD/ounce. Platinum fell 0.5% to 2,138.11 USD/ounce, while palladium lost 1.2% to 1,654.08 USD/ounce.
