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Gold jumps on safe-haven demand after Gaza hospital strike

Gold jumps on safe-haven demand after Gaza hospital strike

By Swati Verma

(Reuters) – Gold prices rose to a one-month high on Wednesday, after a deadly blast in Gaza fuelled fears about the regional conflict escalating and kept the safe-haven asset a favoured choice against war risks.

Spot gold rose 0.8% to $1,938.19 per ounce by 0501 GMT, after scaling its highest since Sept. 20 earlier in the session. U.S. gold futures also jumped 0.8% to $1,950.90.

Gold has benefited from a combination of geopolitical risk premium on fears of a prolonged conflict, momentum after breaking above key technical levels and stagflation risks due to high oil prices, said Kelvin Wong, senior market analyst for Asia Pacific at OANDA.

Hundreds were killed in a blast at a Gaza City hospital on Tuesday, Palestinian officials said, igniting protests in the West Bank and around the Middle East.

“Safe-haven flows amid geopolitical tensions in the Middle East have remained the dominant catalyst for gold prices,” IG market strategist Yeap Jun Rong said.

“The risks of further escalation in the conflict may be supportive of prices for now, but the $1,945 level may prove to be a crucial resistance to overcome.”

Gold prices have surged about $100 since the conflict began, despite recent robust U.S. economic data boosting bets of higher-for-longer interest rates, which tends to weigh on non-yielding gold.

Investors now await Federal Reserve Chair Jerome Powell’s speech on Thursday for cues on interest rates.

“The higher-for-longer (rates) narrative that has pinned down gold over the last couple of weeks appears to see tentative signs of fading as markets look to refreshed comments from Fed officials,” OCBC said in its monthly commodities outlook.

Bullion also got a boost after data showed top consumer China’s economy grew at a faster-than-expected clip in the third quarter from a year earlier.

Spot silver advanced 1.2% to $23.09, platinum rose 0.4% to $900.32 and palladium gained 0.2% to $1,145.60.

(Reporting by Swati Verma in Bengaluru; Editing by Rashmi Aich, Mrigank Dhaniwala and Varun H K)

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