Gold soars as investors bolt for safety from Middle East violence

Mon Oct 09 2023

Gold prices rose more than 1% on Monday as dramatic clashes between Israeli and Hamas forces over the weekend raised the risk of a wider Middle East conflict and boosted demand for safe-haven assets like bullion.

FUNDAMENTALS

* Spot gold jumped 1% to $1,850.87 per ounce by 0056 GMT, having hit its highest level in a week. U.S. gold futures climbed 1.1% to $1,865.20 per ounce.

* Hamas fighters rampaged through Israeli towns as the country suffered its bloodiest day in decades on Saturday. Israel battered Palestinians with air strikes in Gaza on Sunday, with hundreds reportedly killed on both sides.

* The spiralling violence threatens to start a major new war in the Middle East, sending oil prices and Treasuries higher, while U.S. stock futures slipped.

* The safe-haven dollar and Japanese yen edged higher on the Middle East uncertainty, with a blowout U.S. jobs report giving the greenback a further leg up.

* U.S. employment increased by the most in eight months in September as hiring rose broadly, pointing to persistent labour market strength that could give the Federal Reserve ammunition to raise interest rates again, though wage growth is slowing.

* Fed Bank of Cleveland President Loretta Mester said on Friday that the very strong hiring data for last month didn't change her view on the state of the employment sector, while noting upcoming data would drive her views of whether the Fed needed to hike rates again.

* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.2% to 865.85 metric tons on Friday.

* Physical gold demand improved in some Asian hubs last week as a recent dip in prices attracted buyers, with premiums in India hitting a 17-month high as jewellers stocked up ahead of the festival season.

* Among other metals, spot silver gained 1.6% to $21.94 per ounce, platinum was up 0.6% to $881.83 and palladium rose 0.5% to $1,163.49.

Source: http://in.reuters.com