HG MARKETS:

Gold prices surged in Asian trading on Friday, nearing record highs following reports of Israeli strikes on Iran. This escalation heightened demand for safe-haven assets, particularly amid deteriorating conditions in the Middle East. Spot gold reached as high as $2,417.79 an ounce, while June gold futures peaked at $2,433.0 an ounce. Spot prices hovered just below the record highs of $2,430.96 an ounce reached last week. Multiple media reports, including from Iranian news agencies, depicted explosions across various parts of Iran, Syria, and Iraq. U.S. news outlets reported Israeli retaliation against Iran following an attack last week.

Of particular concern were explosions near Isfahan, close to Iranian nuclear facilities. Gold prices rallied for the week on safe-haven demand, despite recent warnings on prolonged U.S. interest rates. The dollar surged post-Iran-Israel news but had minimal impact on gold prices. Friday’s gains positioned gold for significant weekly increases, with spot prices up approximately 3% over the past seven days. This marked the fourth consecutive week of gains, driven by geopolitical tensions in the Middle East.

Other precious metals also rose sharply on Friday. Platinum futures climbed 0.9% to $958.10 an ounce, while silver futures increased 1.1% to $28.70 an ounce. In the industrial metals sector, copper and aluminum prices surged to new highs in 2024, driven by expectations of tighter supplies following increased U.S. sanctions on Russian metal exports. Three-month copper futures rose to $9,799.0 a ton, while one-month copper futures reached $4.4445 a pound, both at their strongest levels since May 2022.

While, The dollar index stabilized around 106 on Friday, after paring early gains, with traders monitoring developments in the Middle East. Israel’s strike on Iran had limited impact, and reports suggest Iran’s nuclear facilities remain secure. Initial concerns over conflict escalation prompted a brief flight to safety, but Iran’s response downplayed immediate risks. Economic data, including retail sales and manufacturing index, signal a resilient US economy and persistent price pressures. Fed policymakers advocate a patient approach to rate cuts, with expectations for the first reduction in September. The dollar index is poised to end the week with minimal change.

Furthermore, Gold stabilized near $2,385 per ounce on Friday, retracting from earlier gains as investors reassessed the Middle East situation. Israel’s missile launch on Iran initially prompted a flight to safety, but reports suggest the attack’s impact was exaggerated, with nuclear facilities reportedly unharmed. Additionally, robust US economic data, including retail sales and Philadelphia Manufacturing PMI, coupled with hawkish comments from Federal Reserve officials, weighed on gold prices. Atlanta Fed Bank President Bostic and NY Fed President John Williams reiterated the Fed’s cautious stance on rate cuts due to persistent inflation, diminishing gold’s appeal amidst elevated interest rates. Despite this, gold is poised for a 1.2% weekly increase, supported by ongoing geopolitical tensions and robust central bank buying.