That’s right, gold rose to its highest level since 2013 as rising tensions in the Middle East fueled the demand for paradises, with Goldman Sachs Group Inc. seeing more space to run. Palladium extended the gains to a new record.
It should be noted that the bullion approached $ 1,600 an ounce after Tehran said it would no longer meet the limits of its uranium enrichment following the assassination of General Qassem Soleimani. President Donald Trump said he is prepared to attack Iran “disproportionately” if he retaliates against any US target.
In this way, it is understood that gold could be a better bet than oil amid rising tensions, according to Goldman analysts. Likewise, it has been indicated that history has shown that, in most of the results, gold will probably recover well beyond current levels.
Prices that could increase
It is important to indicate that spot gold rose to 2.3% to $ 1,588.13 an ounce on Monday, which has been set at its highest level since April 2013 and quoted at $ 1,566.93 at 2:07 pm in New York. Prices could reach $ 1,600 if tensions rise further, according to analysts, including those of UBS Group AG. Futures settled 1.1% higher at Comex.
While further escalation could trigger further price hikes, the rebound runs the risk of running out as liquidity returns to the market after the New Year recess. Meanwhile, JPMorgan Chase & Co. analysts expect an extension of the rebound to $ 1,655 to be “highly likely”, while a break below $ 1,531.22 could lead to a setback.
The Federal Reserve is unlikely to increase interest rates in the next six months, which in turn will probably maintain a dollar limit. The recovery of gold and other precious metals has been “so outstanding” that it is contributing to the weakness of the dollar, Stephen Gallo, European head of foreign exchange strategy at BMO Capital Markets, said in a note.
Likewise, palladium has also benefited from the optimism surrounding paradises, as well as its own positive foundations. Metal has a deficit of several years as the demand for autocatalysts increases amid stricter emission standards.
Source: Ranjeetha Pakiam and Justina Vasquez, Bloomberg | Yahoo Finance