2024-08-16 14:24:04
Gold hit a new all-time high on Friday, breaking through $2,500, as the safe-haven asset benefited from the prospect of U.S. rate cuts and geopolitical risks. At around 2:00 p.m. GMT (4:00 p.m. in Paris) on Friday, the yellow metal rose 1.24% to $2,487.50 an ounce, setting a new absolute high of $2,500.16.
Gold’s demand as a “safe haven” remains strong
Gold prices were boosted by downbeat data on new housing construction released on Friday In July, the United States sent new negative signals to the U.S. economy. Faced with concerns that the world’s largest economy is falling into recession, the market has raised expectations for a rate cut by the Federal Reserve, which could support the economy. “Against the backdrop of the Fed’s rate cut expectations, the sharp drop in bond yields and the dollar is beneficial to zero-yield or low-yield assets such as gold,” explained Fawad Razaqzada, an analyst at City Index.
Moreover, “the demand for gold as a ‘safe haven’ remains in the context of tense geopolitics”, recalls Carsten Fritsch, an analyst at Commerzbank. Diplomatic efforts are intensifying to secure a ceasefire in the Gaza Strip and avoid a full-scale war in the Middle East, with negotiations expected to resume on Friday in Doha (Qatar), where French and British ministers will hold discussions in Israel. Iran, in fact, has threatened to attack Israel in response to the assassination of Hamas leader Ismaïl Haniyeh in Tehran on July 31, an event blamed on Israel.
The risk of military escalation across the region has doubled since the assassination of Haniyeh on July 30 and the death of Fouad Chokr, the military leader of the Lebanese movement Hezbollah, in an attack near Beirut for which Israel claimed responsibility. On Thursday, a deadly attack by Jewish settlers in a village in the occupied West Bank sparked strong protests, including from Israel.
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