Gold, USD and US government bond prices all increased in the session on October 13, as investors worried about escalating tensions in the Middle East.
At the close of trading on October 13, spot gold prices increased by 64 USD per ounce to 1,932 USD. This is the highest level in more than a month. This development also helped gold prices record the strongest weekly increase in 7 months.
"Investors are rushing to buy safe-haven assets as tensions in the Middle East escalate. If the geopolitical situation gets worse, there is a high possibility that gold prices could reach $2,000 this year. The market has gone from $1,850 to almost $1,950. $2,000 is just a little bit away," said Edward Moya, a market analyst at OANDA.
World gold prices skyrocketed in the session of October 13.
Investors fear a wider conflict in the Middle East as Israel begins its advance into the Gaza Strip. Previously, it had only carried out airstrikes.
The yield on the 10-year US Treasury note fell to 4.63% yesterday, meaning bond prices have risen. Like gold, US Treasury bonds are considered a safe investment in times of uncertainty.
The dollar also strengthened on safe-haven demand. The Dollar Index, which measures the greenback against a basket of six major currencies, rose 0.11% to 106.63 yesterday. The index rose 0.8% in the previous session, its strongest in six months.
"Investors' goal is to put money into safe-haven assets before the situation worsens this weekend. Everything in the Middle East is going from bad to worse," said Marvin Loh, global macro strategist at State Street.
Data released on October 13 also showed that China’s consumer price index (CPI) remained almost unchanged in September. The producer price index (PPI) also fell, indicating that deflationary pressures remained. The country’s import and export turnover continued to decline, although at a slower pace.
Ha Thu (according to Reuters)
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