(Bloomberg) -- Gold topped $2,700 an ounce for the first time, as concerns over escalating conflicts in the Middle East saw investors flock to safety.
Bullion climbed as much as 0.5% to $2,706.81 an ounce, after Israel said it killed Hamas leader Yahya Sinwar, the architect of the Palestinian group’s attack on southern Israel that triggered a year-long war in Gaza.
Prime Minister Benjamin Netanyahu said Israel would keep fighting until all the hostages seized by Hamas last year are free, even as President Joe Biden said it was time for the war to end. Investors typically seek safety in gold in times of geopolitical and economic uncertainty.
Haven demand outweighed macro headwinds that would normally weigh on the precious metal, after US reports on Thursday diminished bets on the scale of Federal Reserve easing. Retail sales strengthened in September by more than forecast and jobless claims unexpectedly fell in a separate print, reinforcing the view the economy is nowhere near a recession. Higher interest-rate environments typically pressure non-yielding gold.
Gold is almost 2% higher for the week, with investors also repositioning portfolios ahead of the US election on Nov. 5. With both candidates posing different risks to the economy, gold is likely to see further support — no matter whether Donald Trump or Vice President Kamala Harris wins.
Bullion — up more than 30% this year — is one of 2024’s strongest performing commodities. Rate-cut optimism fueled the most recent gains as the Fed kicked off its easing cycle last month. Robust central bank buying has also been a long-standing pillar of support for gold prices.
Western investors have also helped drive prices higher, after largely remaining on the sidelines in the first half of the year as Asian demand surged. The US central bank’s pivot to looser monetary policy has bolstered the appeal of exchange-traded funds backed by bullion, with holdings on course for a fifth monthly expansion in October — the longest run of inflows since 2020.
Spot gold was trading at $2,703.97 an ounce as of 9:58 a.m. in Singapore. The Bloomberg Dollar Spot Index fell 0.1%, snapping a four-day rally. Silver, palladium and platinum all climbed.
©2024 Bloomberg L.P.