Gold prices soar as Middle East conflict continues to impact prospects for ceasefire

As tensions between Iran escalate and push oil prices higher, and U.S. Treasury yields rise, gold prices have surged sharply.

Spot gold once climbed 4.1%, topping $4,550 per ounce, reclaiming the previous trading day’s losses, as concerns in the market about the prospects for a ceasefire between Iran and Israel deepened. Iran and Israel have continued to fire missiles at each other, and on Friday morning Iran also carried out strikes against multiple Persian Gulf countries.

These attacks came after Trump promised to delay strikes on Iran’s energy facilities by 10 days, giving the market—which has been battered by nearly a month of ongoing conflict—brief breathing room.

Since the war broke out on Feb. 28, the price of gold has fallen nearly 15%. Its trend has generally moved in sync with the stock market, and in the opposite direction of oil prices. The spike in energy prices has increased inflation risks, prompting investors to bet that central banks in various countries will keep interest rates unchanged or even raise them, which is a negative factor for gold, an asset that does not generate interest.

At 11:53 a.m. in New York time, spot gold was up 3.5% to $4,528.88 per ounce. Silver rose 4.2% to $70.91. Platinum and palladium also rose. The Bloomberg dollar spot index was up 0.08%, after rising 0.4% on the previous trading day.

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Byline: He Yun