Gold has gained about a fifth this year, underpinned by heightened geopolitical and trade tensions as well as concerns about the Federal Reserve’s independence.
Gold pushed higher, after the dollar declined and the war in the Middle East entered a sixth day with no sign of resolution.
Bullion rose as much as 0.9% to top $5,180 an ounce, following a 1% gain in the previous session. Investors were seeking safer assets as US and Israeli forces continued to bomb Iran, and the Islamic Republic fired missiles into several countries in the region, attacking critical energy infrastructure and effectively blockingBloomberg Terminal the strategic Strait of Hormuz.
President Donald Trump expressed confidence in the American military campaign and the US sank an Iranian warship in international waters. Tehran dismissed as “pure falsehood” a report that its Ministry of Intelligence had reached out to Washington to negotiate an end to the conflict.
As the war drags on and energy prices spike, global trade could face another shock as Washington prepares to introduce higher import tariffs. Treasury Secretary Scott Bessent said on Wednesday that Trump’s plan to increase a universal 10% levy to 15% will likely take effect this week. The European Union expects to be exempt from the hike.
Gold has gained about a fifth this year, underpinned by heightened geopolitical and trade tensions as well as concerns about the Federal Reserve’s independence. The metal hit an all-time high above $5,595 an ounce in late January.
Further support came on Wednesday from the dollar’s biggest fall in about three weeks, with rising oil prices and equities putting pressure on the US currency. A weaker greenback supports gold as it makes the metal more affordable for most buyers. A key gauge of the dollar has fallen roughly 0.4% in the last two days, though it has still gained nearly 1% this week.
That dollar strength earlier in the week, as well as broad selloffs in equity markets, prompted a sharp, one-day decline in precious metals on Tuesday. Since then, gold and silver have had “little exchange-based speculative overhang” as investors unwound their overbought positions, Rhona O’Connell, head of market analysis at StoneX Financial Ltd., said in a note.
Spot gold rose 0.7% to $5,176.83 an ounce as of 9:23 a.m. in Singapore. Silver added 1.5% to $84.79, extending a gain of nearly 2% on Wednesday. Platinum and palladium also advanced.
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