Gold futures saw a significant rise as escalating hostilities in the Middle East, particularly Iran’s missile strike on Israel, raised concerns of a broader conflict. This geopolitical uncertainty is bolstering demand for safe-haven assets like gold. Rhona O’Connell of StoneX noted that the ongoing tensions, coupled with uncertainty surrounding the Federal Reserve’s policy direction, are providing tailwinds for gold prices. Without these factors, she added, gold could be susceptible to profit-taking, which might push prices down to the $2,500 to $2,600 range per ounce.
In today’s trading, front-month gold futures settled 1.1% higher, reaching $2,667.30 an ounce, edging closer to last week’s record high. SPDR Gold shares also rose by 1.2%.
Comex Gold Highlights:
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October delivery Comex gold gained $31.20 per ounce, or 1.18%, to close at $2,667.30 today.
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This marks the largest one-day dollar and percentage gain since Friday, Sept. 20, 2024.
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It’s the second-highest close on record.
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Gold snapped a two-day losing streak, with today marking gains in eight of the last ten sessions.
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The settlement price is the second highest this year, just 0.10% off its 52-week high of $2,669.90, reached on Sept. 26, 2024.
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Gold is up 46.83% from its 52-week low of $1,816.60 recorded on Oct. 5, 2023, and up 46.19% from one year ago.
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Year-to-date, gold has risen $604.90, or 29.33%.
Comex Silver Update:
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October delivery Comex silver gained 28.10 cents per ounce, or 0.90%, to settle at $31.445 today.
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Silver snapped a two-day losing streak but remains 2.36% off its 52-week high of $32.205, hit in May 2024.
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Silver has surged 50.83% from its 52-week low of $20.848 in October 2023 and is up 48.48% from one year ago.
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Year-to-date, silver is up $7.592, or 31.83%.
Middle East Escalation Drives Gold Higher
Gold’s safe-haven appeal continues to rise as fears of a full-scale war in the Middle East intensify. The White House announced that Iran is preparing a ballistic missile attack on Israel, potentially escalating the conflict. This would follow the killing of Hezbollah leader Hassan Nasrallah and Israel’s ground operation in Lebanon. The U.S. has committed to assisting Israel in defending against these anticipated strikes. Gold futures climbed 1.2%, trading at $2,690.60 per ounce during European afternoon trading.
China’s Economic Shift to Support Base-Metal Demand
China’s base-metal demand in 2025 is expected to be driven by electric vehicles, renewable energy, and lithium-ion batteries, according to the Shanghai Metals Exchange. This may offset some losses from the nation’s weakening real estate sector. Analysts predict that without new stimulus measures, China may struggle to meet its 5% GDP growth target for 2024. The slow recovery of the property market and associated materials demand, such as copper and iron ore, will likely weigh on the economy.
Metals Rise Amid Chinese Stimulus and Stronger U.S. Dollar
Metal prices edged up in early European trading following measures introduced by Chinese cities to support the real estate market. Three-month copper rose 0.2% to $9,883.50 per metric ton, while aluminum climbed 0.8% to $2,624.50 per ton. Gold futures remained steady at $2,665.50 per ounce after the Federal Reserve signaled a more moderate easing cycle. However, a stronger U.S. dollar tempered broader gains.
Potential for Metals and Uranium Price Spikes Due to Russia
Prices for metals like nickel, platinum, and uranium could see a sharp rise if Russia restricts exports of these commodities in response to Western sanctions, Citi analysts warn. Russia accounts for significant portions of global nickel, platinum, and uranium supplies. Any export bans, particularly targeting countries labeled as “unfriendly,” could disrupt the supply chain, causing temporary spikes in these metal prices.
