Gold and Oil Surge Amid Rising Geopolitical Tensions

Gold prices recovered over 1% as Middle East conflicts boost safe-haven demand. Spot gold reached $5,157.30, while U.S. futures rose to $5,165.80. Oil and gas prices also surged due to the U.S.-Israeli war on Iran, affecting energy exports, and complicating inflation prospects and monetary policy.

Gold prices rose by over 1% on Wednesday, bouncing back from a one-week low as escalating Middle East tensions rattled global markets and pushed investors towards safe-haven assets. At 0453 GMT, spot gold climbed 1.4%, reaching $5,157.30 per ounce, with U.S. gold futures for April delivery increasing by 0.8% to $5,165.80.

Previously, gold prices had plummeted more than 4%, marking their lowest point since February 20, pressured by a stronger dollar and reduced expectations of rate cuts amid inflationary worries fueled by fears of an extended conflict. Nonetheless, experts like Ilya Spivak predict that gold will remain resilient, driven by its independent narrative.

Meanwhile, oil and gas prices surged as Middle East tensions intensified, truncating energy exports. The U.S.-Israeli conflict with Iran has resulted in Iranian attacks on ships and energy facilities, disrupting operations from Qatar to Iraq. Christopher Wong from OCBC noted that higher oil prices, driven by these geopolitical tensions, have exacerbated inflation concerns and muddied monetary easing prospects.

(With inputs from agencies.)