Gold prices surged to a one-week high, trading around $2,630 per ounce on Tuesday. Investors turned to the precious metal as geopolitical tensions flared, reigniting its appeal as a safe haven.
- Geopolitical turmoil drives gold demand: Russia revised its nuclear policy, lowering the threshold for using nuclear weapons. This move follows the U.S. approval for Ukraine’s use of long-range missiles against Russia.
- Market reaction: Gold rose 0.58% by midday on COMEX, marking a continued climb since Monday.
- Year-to-date performance: Gold is up 27% in 2024, outperforming the S&P 500’s 23% gain.
- Central banks boost reserves: Major institutions continue to accumulate gold, reinforcing its stability as an asset.
- Analyst outlook: Goldman Sachs advises investors to buy gold, projecting a price of $3,000 by the end of 2025.
- Interest rates factor: Lower interest rates have bolstered gold’s recent rally, enhancing its appeal despite being a non-yield asset.
The renewed geopolitical instability underscores gold’s enduring role as a hedge against uncertainty. As tensions rise, the precious metal is poised to remain a key player in global markets.
