Gold Prices Surge Amid Geopolitical Tensions

Gold prices continue to rise due to investor interest in safe-haven assets amid U.S.-Iran tensions. Spot gold increased by 2.4% on Wednesday, following a substantial gain on Tuesday. Investors focus on risks that include geopolitical tensions and the U.S. Federal Reserve's potential policy changes.

Gold continued its upward trajectory on Wednesday, building on Tuesday's significant surge—its largest in 17 years—as geopolitical tensions between the United States and Iran heightened. Spot gold rose 2.4% to $5,057.50 per ounce as of 0945 GMT.

The strengthened demand for gold, a traditional safe-haven asset, is attributed to a combination of risks including concerns over central bank independence and escalating geopolitical uncertainties. Comments from WisdomTree strategist Nitesh Shah highlighted these drivers.

The geopolitical landscape saw heightened drama as the U.S. military reported downing an Iranian drone, complicating ongoing nuclear discussions. Additionally, scrutiny over Fed Chair Jerome Powell is drawing attention to central bank dynamics, amid rising expectations for more Federal Reserve rate cuts.

(With inputs from agencies.)