Gold extends rebound near $1,860 per ounce on the back of tampering interest rates and raised geopolitical risk in the Middle East due to the ongoing Israel-Hamas conflict, driving safe-haven demand for the precious metal. Further, experts maintain a bullish gold price outlook.
Against this backdrop, it could be wise to invest in fundamentally sound gold stocks Kinross Gold Corporation (KGC – Get Rating), B2Gold Corp. (BTG – Get Rating), and Dundee Precious Metals Inc. (DPMLF – Get Rating) for growth.
Gold prices continue to surge on increased market uncertainty due to the ongoing conflict in the Middle East and dovish comments from the top U.S. Federal Reserve officials weighing on the dollar and bond yields.
Military clashes between Israeli forces and Palestinian Islamist group Hamas raised political unrest in the Middle East, driving the safe-haven appeal of the yellow metal. The conflict further threatens investors with enhanced volatility, adding uncertainty ahead of the corporate earnings season and the U.S. inflation report this week.
“The events in the Middle East have provided a catalyst for gold to rebound from oversold conditions,” said Kyle Rodda, financial market analyst at Capital.com.
Spot gold soared 0.1% to $1,862.80 per ounce by 0314 GMT, following hitting its highest since September 29. U.S. gold futures gained 0.7% to $1,876.90. Moreover, gold grew 1.6% yesterday, marking its biggest one-day jump in nearly five months.
Traditionally, Gold is considered a safe-haven investment during uncertain economic times; however, since it yields no interest, it tends to lose its attraction when interest rate increases.
Recent remarks by top Fed officials prompted investors to undermine the probability of further interest rate hikes, boosting gold prices. As per Fed Vice Chair Phillip Jefferson, the central bank would need to “proceed carefully” given the recent rise in bond yields, while Dallas Fed President Lorie Logan said there may be less need to raise the Fed fund rate if long-term rates remain elevated.
According to the CME Group’s FedWatch Tool, markets are seeing a more than 84% chance that the Fed will hold interest rates steady in its upcoming…
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