October 22, 2024
New Delhi, India
Gold Prices
Gold (XAU/USD) climbed to trade in the $2,730 range on Tuesday as investors sought safe-haven assets amid the escalating conflict in the Middle East. The yellow metal’s rally comes despite a slowdown due to rising bond yields and a shift in global interest rate expectations.
Safe-Haven Demand Boosts Gold
Gold’s ascent is primarily driven by heightened geopolitical tensions. The ongoing conflict in the Middle East, including Hezbollah’s rocket attacks and Israeli airstrikes, has led to increased investor demand for safe-haven assets. Despite diplomatic efforts, a ceasefire remains elusive, further fueling Gold’s upward momentum.
Interest Rate Outlook Limits Gains
However, Gold’s upside is capped by changing expectations for global interest rates. Investors no longer anticipate sharp cuts from the Federal Reserve, as stronger-than-expected U.S. economic data has reduced the likelihood of aggressive rate reductions. This diminishes Gold’s appeal as a non-interest-paying asset, potentially slowing its rally.
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