Gold rallies to near-two month high as Middle East conflict intensifies
Investors were flocking to gold on Friday after Israel’s attack on Iran sparked a demand for the safe haven asset.
The rush sent gold prices up one per cent to their highest level in nearly two months at $3,441.90
The bullion pulled on track for a weekly gain as the Middle Eastern conflict ramped up.
Shares in gold miners Fresnillo and Endeavour each climbed one per cent during early trading.
Ricardo Evangelista, senior analyst at ActivTrades, said: “The heightened risk environment triggered a flight to safety across financial markets, boosting demand for haven assets such as gold.”
But Evangelista warned any further upside for the yellow metal was limited “by a rebound in the US dollar.”
Dollar’s rebound holds gold back
The dollar made gains on Friday morning, managing to bounce back from its lowest level since 2022.
“As a fellow haven asset, increased demand for the dollar has capped gold’s gains due to the inverse price correlation between the two,” the analyst said.
The pound was weaker against the dollar in early trading in London. Sterling was down 0.5 per cent against the greenback, trading between $1.35 and $1.36.
Meanwhile, oil prices spiked more than nine per cent early Friday before easing to a 5.5 gain at $73.12 a barrel.
Donald Trump’s tirade on Truth Social helped keep the prices firm, after the President told Iran to make a nuclear power deal “before there is nothing left”.
The FTSE 100, which closed on a record high on Thursday, fell 50 points on opening.
Derren Nathan, head of equity research at Hargreaves Lansdown, said: “It’s no surprise FTSE 100 futures are pointing down this morning…
“Oil majors Shell and BP both felt the tailwind of rising oil prices, while precious metal producers Endeavour Mining and Fresnillo both had a good day. Risk is likely to remain off the table for now as the world braces for a response from Tehran, although recent history suggests Iran’s capabilities to penetrate Israel’s defences are limited.”