Gold firms amid stronger dollar as geopolitical concerns mount

GOLD PRICES climbed on Monday due to safe-haven demand spurred by Middle East tensions, even as the dollar and Treasury yields gained following a higher-than-expected uptick in US retail sales in March, feeding apprehensions that the US Federal Reserve could delay cutting interest rates this year.

Spot gold rose 0.9% to $2,365.09 per ounce as of 2 p.m. ET (1800 GMT), after hitting a record high of $2,431.29 on Friday in anticipation of Iran’s retaliatory attack against Israel.

US gold futures settled 0.4% higher at $2,383.

This very much seems like a geopolitically driven price move, which might be related to statements from the Israeli defense forces that something is going to materialize here, said Bart Melek, head of commodity strategies at TD Securities.

Iran launched explosive drones and missiles late on Saturday in the first attack on Israel by another country in over three decades, stoking fears of a broader regional conflict.

The dollar rose 0.2% and 10year Treasury yields hit a fivemonth high after data showed US retail sales increased more than expected in March, further evidence that the economy had ended the first quarter on solid ground.

However, “in the near term, gold prices could fall towards $2,200 as the geopolitical premiums get washed out,” said Daniel Pavilonis, senior market strategist at RJO Futures.

Central bank buying has also lent support to bullion.

Meanwhile, spot silver rose 3% to $28.72 after hitting a nearly three-year high in the previous session.

Platinum fell 0.6% to $968, and palladium lost 2% to $1,028.34.