Gold Prices Rise, Approaching a Two-Month High
On Monday, spot gold prices rose by 0.4%, reaching $3,447.07 per ounce, hitting the highest level since April 22 during intraday trading; U.S. gold futures also climbed by 0.4%, reaching $3,467.20 per ounce. This rise was mainly driven by escalating tensions in the Middle East, as investors sought safe-haven assets like gold to hedge against geopolitical risks.
As hostilities between Israel and Iran escalated once again, market sentiment for safe havens soared, driving continuous increases in gold prices. Gold, known as a global safe asset, often becomes a preferred investment amid rising uncertainty.
Israel-Iran Conflict Ignites Market Safe-Haven Sentiment
On Sunday, a new round of clashes erupted between Israel and Iran, causing civilian casualties. Both military forces warned civilians to take precautions, suggesting that the conflict could persist or even escalate. This news quickly spread to financial markets, sparking concerns among global investors about broader geopolitical instability.
U.S. President Trump publicly stated that he "hopes" Israel and Iran will reach a ceasefire agreement but also added that "sometimes nations have to fight until a victor emerges," which raised doubts about the U.S.'s willingness to mediate.
Fed Meeting Approaches, Rate Cut Expectations in Focus
Beyond geopolitical factors, investors are also closely watching the upcoming Federal Reserve monetary policy meeting. The meeting will be held from June 17 to 18, with policy resolutions announced this Wednesday.
Although the market widely expects the Fed to leave rates unchanged this time, investors are eagerly watching to see if the Fed will hint at room for rate cuts in the coming months, especially against the backdrop of a slowdown in job growth and increasing global risks. Any statement regarding rate cuts could further boost gold.
Analysts point out that if the Fed signals a dovish stance, combined with the current geopolitical conflicts and uncertainties, gold prices may further challenge the $3,500 mark.
Divergence in Precious Metals Market, Silver Under Pressure
As gold rises, other precious metals show divergent trends. Spot silver slightly fell by 0.2% to $36.23 per ounce; platinum rose by 0.6% to $1,234.47; and palladium led the gains with a 0.9% increase to $1,036.58.
Market participants believe that although silver is often seen as a complementary safe-haven to gold, its short-term performance remains weak in light of the strong dollar and uncertain industrial demand outlook. Meanwhile, platinum and palladium benefit more from demand in the automotive industry and technical uses.
Gold Prices Likely to Remain at High Levels
Considering the current situation, analysts generally believe that in the absence of signs of easing Middle East tensions and with uncertainties remaining in the Fed's policy path, gold prices will maintain a high-level oscillation pattern.
If the Fed releases a dovish signal and the Israel-Iran situation further deteriorates, it is possible that gold prices could break previous highs and set new records. Additionally, the market will also pay attention to the movement of the dollar and changes in real interest rates, as these will further impact the precious metals market.
