Gold prices touched a near one-month high on Wednesday, after a deadly blast in Gaza fuelled fears about the Middle East conflict escalating and kept the safe-haven asset a favoured investment.
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 may be supportive of prices for now, but the $1,945 level may prove to be a crucial resistance to overcome.”