Gold Prices Rise Amid Middle East Tensions, Safe-Haven Demand

Alanbatnews -

Gold prices extended gains for a fifth consecutive session on Tuesday, driven by investors seeking safe-haven assets amid escalating tensions in the Middle East. Concerns that the conflict could broaden into a protracted regional war and heightened uncertainty fueled the demand for gold.

Spot gold rose 1% to $5,377.21 per ounce. During the previous session, gold reached its highest level in over four weeks following reported strikes in Iran.

U.S. gold futures for April delivery increased 1.5% to $5,391.90.

Escalating tensions followed reports of strikes, with a senior official from Iran's Revolutionary Guard reportedly warning of potential closures to the Strait of Hormuz. This raised concerns about disruptions to global oil flows.

The warning was the most explicit from Tehran since advising ships that it might close the strait, a move that threatens to halt a significant portion of global oil transit and sharply increase crude prices.

The dollar hovered near its highest level in over five weeks, supported by robust demand and risk aversion in the market.

While a stronger dollar typically makes dollar-denominated assets like gold more expensive for holders of other currencies, this inverse relationship is not absolute.

In times of heightened uncertainty, such as escalating conflicts or broader market volatility, investors often buy both the dollar and gold as safe-haven assets.

Among other precious metals, spot silver rose 1.4% to $90.67 per ounce, after climbing to its highest level in over four weeks in the previous session.

Spot platinum increased 0.6% to $2,316.50, while palladium rose 1.6% to $1,795.08.