Gold prices rise slightly amid geopolitical uncertainty
Gold prices rose slightly during trading today, driven by uncertainty in global markets. This increase comes as investors await developments in the anticipated talks between the United States and Iran, in addition to the ongoing ambiguity surrounding US tariff policies, which enhances the appeal of the precious metal as a safe haven during times of turmoil.
Background of tensions and their impact on markets
The current state of anticipation stems from a long history of tensions between Washington and Tehran, particularly concerning Iran's nuclear program. These tensions escalated significantly after the Trump administration withdrew from the nuclear agreement (the Joint Comprehensive Plan of Action) and reimposed economic sanctions on Iran. This politically charged atmosphere is creating anxiety in global financial markets, as investors fear any escalation that could destabilize the Middle East, a region vital to global energy supplies. In this context, investors are turning to gold as an effective hedge against geopolitical risks and market volatility.
Gold as a safe haven amid economic uncertainty
Gold has historically been viewed as a store of value, preserving its purchasing power during times of inflation or currency devaluation. When economic uncertainty increases, such as that stemming from trade wars and unexpected tariffs, investors tend to reduce their holdings of riskier assets like stocks and turn to gold. Carlo Alberto De Casa, an analyst at Swissquote Bank, noted that ongoing tensions between Iran and the United States, coupled with the uncertainty surrounding Trump's tariff policies, are currently providing significant support for gold prices.
Market performance and analyst forecasts
In more detail, spot gold rose 0.1%, after hitting its highest level in more than three weeks earlier. Meanwhile, U.S. gold futures fell 0.7%. A weaker U.S. dollar also supported gold prices, as it makes the precious metal less expensive for holders of other currencies.
De Casa added that the global surge in gold demand is not yet over, noting that sentiment remains positive, supported by strong demand from Asia and central banks seeking to increase their reserves of the metal. On the economic data front, investors are awaiting the release of weekly US jobless claims figures for clues about the health of the world's largest economy.
A look at other precious metals
As for other precious metals, their prices were mixed. Silver fell by 2.1%, platinum by 0.5%, and palladium by 0.5%, reflecting investors' primary focus on gold as the main measure of risk in the markets at present.
