Gold Rallies on Safe-Haven Demand, Crude Oil Surges Amidst Middle East Tensions
Gold futures on the New York Mercantile Exchange (COMEX) rose for a third straight session, settling at $4,206.32 per troy ounce in the December contract. This represents an increase of $19.62 (0.47%) from the previous day.
The rally was driven by dip-buying, as investors took advantage of perceived value in gold amidst a stronger dollar and rising U.S. Treasury yields overnight. However, long-term U.S. yields turned lower during the regular session, which contributed to the upward momentum.
While inflation concerns tied to surging crude oil prices capped upside momentum for gold, the metal's appeal as a non-yielding asset was enhanced by the Federal Reserve's monetary policy outlook. The August PCE Price Index showed a year-over-year increase below market expectations, dampening speculation of an early rate hike.
Meanwhile, crude oil futures on the NYMEX extended their rally, with the November contract for WTI settling at $92.93 per barrel, up $2.51 (2.78%) from the prior session. Middle East supply disruptions and concerns over escalating strikes against Iran fueled the rise in crude prices.