Gold Prices Soar on Falling Oil Amid Middle East Tensions
Gold prices surged to a one-week high on Friday, buoyed by falling oil prices and ongoing tensions in the Middle East. Spot gold rose 1.1% to $4,387.69 per ounce, while U.S. gold futures advanced 0.6% to $4,428.
The uptick coincided with a third consecutive session of declines for oil prices, as diminishing fears over supply disruptions offset broader concerns regarding the widening Middle East conflict.
'The precious metal appears to have taken the Fed's hawkish signals in stride, instead finding immediate relief from falling oil prices amid hopes that the Fed's hiking cycle will prove shallow,' said Han Tan, chief market analyst at Bybit.
Gold is often seen as a hedge against inflation, but elevated interest rates typically dampen demand for the non-yielding metal. However, Goldman Sachs expects 'the impact of tighter monetary policy to be felt primarily through a slower near-term appreciation path rather than a lower terminal gold price.'