Gold prices climbed on Monday, approaching a two-month high as investors flocked to safe-haven assets amid heightened tensions in the Middle East, raising fears of a wider regional conflict.
In Dubai, gold rates surged, with 24-carat gold increasing by over AED2.00 to AED414.15, and 22-carat gold rising to AED383.45. Additionally, 21-carat gold reached AED366.01, while 18-carat gold edged up to AED313.72.
Spot gold rose by 0.4 percent to $3,447.07 an ounce (currently trading above $3,430), having hit its highest level since April 22 earlier in the day. U.S. gold futures also increased by 0.4 percent to $3,467.20 (currently trading above $3,450).
The U.S. Federal Reserve is set to hold its policy meeting on June 17-18, with an announcement expected on Wednesday. While the central bank is largely expected to maintain interest rates, markets are looking for indications of possible rate cuts in the near future. The Fed has kept its benchmark federal funds rate at 4.25-4.50 percent since December, following a quarter-point reduction. Futures markets indicate expectations for two rate cuts by the end of the year, potentially starting in September, supported by last week’s subdued inflation data.
Consumer sentiment
Gold, typically viewed as a safe-haven asset during periods of geopolitical and economic uncertainty, tends to perform well in low-interest-rate environments. Meanwhile, U.S. consumer sentiment improved for the first time in six months in June as trade tensions between the U.S. and China eased, although households remain concerned about the economy’s direction. In other metals, spot silver decreased by 0.2 percent to $36.23 per ounce, platinum rose by 0.6 percent to $1,234.47, and palladium gained 0.9 percent to $1,036.58.
Recent data and events include China Urban Investment (YTD) year-on-year for May, China Retail Sales year-on-year for May, China CPI month-on-month non-seasonally adjusted for May, India WPI Inflation year-on-year for May, and EU Reserve Assets total for May.
