Gold Hits New Record High as Geopolitical Tensions Escalate
Gold prices soared to a new all-time high on Tuesday, driven by a combination of safe-haven demand and bullish sentiment in the market. The precious metal’s rally comes amidst rising tensions in the Middle East following an Israeli strike on an Iranian diplomatic building in Syria, which killed a senior Iranian general.
The top mining ETF, VanEck Gold Miners ETF (GDX), surged 1.3% on the news, while gold futures settled at a record high despite gains in the dollar and U.S. Treasury yields.
AMEX:GDX chart by TradingView
Tobi Opeyemi Amure, an analyst at Trading.Biz, attributes the recent surge in gold prices to a combination of factors. “An underlying bid from retail and central banks was joined by momentum-following speculators who have extended their already elevated longs following gold’s break above $2,200/oz,” Tobi explains.
“While investor positioning was showing growing signs of exhaustion given the modest reductions through late-March, fresh pops higher in both gold and silver prices in the last few trading sessions has likely revitalized investor interest in the sector to start the new quarter,” said analysts at JPM Global Commodities Research.
Several mining stocks also posted intraday 52-week highs, including:
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In addition to the geopolitical tensions, the likelihood of higher for longer U.S. interest rates has also contributed to the rally in gold prices. Monday’s data showed that U.S. manufacturing rose for the first time in March in a year and a half, further supporting the case for higher interest rates.
As the global economic and geopolitical landscape continues to shift, investors are increasingly turning to gold as a safe-haven asset. With the precious metal’s prices hitting new highs and investor interest revitalized, it remains to be seen how long this bullish trend will continue.
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