Gold Reaches Record High Amid Geopolitical Uncertainty
Gold surged to a new record high on Monday as investors sought the safety of bullion following the sudden death of Iranian President Ebrahim Raisi over the weekend.
Spot gold rose to USD2,435.76 an ounce around 1150 BST on Monday, up from USD2,385.57 on Friday. The yellow metal briefly touched USD2,450 an ounce before retreating slightly. Silver also saw an increase, rising to USD31.77 from USD29.70.
Iranian President Raisi was declared dead on Monday after rescue teams found his crashed helicopter in the fog-shrouded mountains of East Azerbaijan province. Along with Raisi, Foreign Minister Hossein Amir-Abdollahian and seven others, including the pilot and bodyguards, were killed.
The Iranian authorities lost contact with Raisi's helicopter on Sunday afternoon as it flew through a foggy area of the Jolfa region. The incident has led to heightened geopolitical tensions, particularly regarding Iran's relations with Israel.
"Investors are digesting the news and trying to assess what this event could mean on the geopolitical front in the military conflict with Israel," said Ricardo Evangelista, an analyst at ActivTrades. The immediate reaction was a rush to safer havens such as gold and silver.
The demand for gold has also been influenced by renewed speculation that the US Federal Reserve might cut interest rates this year, according to Susannah Streeter, an analyst at Hargreaves Lansdown. Softer-than-expected US consumer price inflation data has revived hopes that the Fed may start easing monetary policy this year.
In other commodities, Brent Crude was priced at USD83.88 a barrel on Monday, up slightly from USD83.42 on Friday. West Texas Intermediate edged higher to USD79.85 a barrel from USD79.40. Energy prices have inched up amid fresh Middle East uncertainty following Raisi's death.
"Brent Crude prices have been edging up amid the fresh geopolitical uncertainty prompted by the reported deaths of key figures in the Iranian regime," noted Streeter. Concerns about the health of King Salman of Saudi Arabia have also influenced the market. His son, Crown Prince Mohammed bin Salman, has postponed a visit to Japan due to his father's illness.
Platinum was up at USD1,080.82 an ounce on Monday from USD1,059.10 on Friday, while palladium increased to USD1,022.50 an ounce from USD988.78.
Base metals also saw gains. Spot copper rose to USD10,481.00 a tonne from USD10,400.00, and aluminium increased slightly to USD2,598.00 a tonne from USD2,595.50. Copper prices hit fresh record highs, partly due to new measures aimed at supporting China's property sector and a squeeze on short positions, according to UBS.
Energy prices are expected to be a focal point at the next OPEC meeting on June 1, where members will decide on future production quotas.
