Gold Surge Amid U.S.-Iran Tensions: Safe Haven Shines

Gold prices have surged significantly due to rising tensions between the U.S. and Iran, and concerns over central bank independence. Spot gold increased by 2.2% after a 5.9% rise the prior day. The market also observed fluctuations in U.S. gold futures, silver, platinum, and palladium.

Amid escalating tensions between the United States and Iran, gold has emerged as the favored safe-haven asset, witnessing a substantial rise in value. On Wednesday, spot gold climbed by 2.2%, following its largest one-day jump in 17 years, closing at $5,046.47 per ounce.

Driving the surge is the intersection of geopolitical risks and worries about central bank independence, according to Nitesh Shah, a strategist with WisdomTree. Compounding the scenario, an Iranian drone was downed by the U.S. military near the Arabian Sea, amplifying the geopolitical discord.

Additionally, U.S. President Trump's remarks on the Federal Reserve further stoked market volatility. Despite a previous plummet due to changes at the Fed and CME margin hikes, gold is up over 17% for the year. Analysts like UBS's Giovanni Staunovo forecast further gains in gold prices, anticipating a rise to $6,200 per ounce by year-end.

(With inputs from agencies.)