Gold Gains Amid Israel-Iran Escalation; Silver Steadies Above $36

 

Gold Gains Again After Fresh Middle East Escalations

(Bullion News Network) – The spot price of gold jumped again on Friday to end the week, gaining nearly $50 per troy ounce on geopolitical uncertainty. This brings gold’s price within $70 of its recently set all-time high just above $3,500/ozt. Today was gold’s third consecutive gain, bringing the precious metal from $3,323.55 on Tuesday to over $3,430 per ounce, which is just a few dollars short of a three-month peak. Geopolitical uncertainty is in focus to end the trading week. On Thursday, Israel unleashed what experts have called an unprecedented attack on Iran, targeting key military leaders and the country’s nuclear program. Iran responded with a series of retaliatory ballistic missile strikes against Israel. 

While the risk of conflict has driven gold prices sharply higher, silver continued to stagnate on the heels of its historic performance last week, which drove the precious metal to a 13-year high. The price of silver moved sideways on the day, hovering at around $36.40/ozt with minimal price movement up or down. The price action heavily favored gold, driving the gold-silver ratio higher for a fourth consecutive day. This ratio hit a two-month low on Monday, pulling back to 90.48:1 after spending several weeks relatively unchanged near 100:1. This week’s sustained gold price appreciation drove the gold-silver ratio back up past 94:1, with the ratio gaining 1.42:1 on Friday amid heightened geopolitical tensions in the Middle East.

Platinum saw a major retraction today, dropping about $66 per troy ounce, erasing some of the gains that drove the precious metal to a 10-year high last week. Trader efforts to reduce risks amid the heightened Middle East tensions may be to blame for the trend reversal, according to some analysts. Last week, the price of platinum rocketed past a 10-year high. Some experts say that the demand for the whitish precious metal has increased as jewelers turn to platinum as a substitute for gold, which continues to become more valuable amid historically high safe haven demand. 

Palladium prices also pulled back to a lesser degree, with the spot price of the platinum group metal retreating by just under $30 per troy ounce and settling right above $1,050/ozt. Despite the retreat, palladium prices are still hovering near a 2025 high. Both platinum and palladium are primarily used in the manufacture of catalytic converters for automobiles. Experts say that the long-term price target for either precious metal is likely to hinge chiefly on the performance of the electric vehicle sector, which has been historically poised as a structural threat to demand for both platinum and palladium.

Next week, geopolitical news and economic data will take center stage in the precious metals market. Notably, investors will pay close attention to how the ongoing situation in Iran develops. After a series of retaliatory strikes on Israel by Iran, some experts believe this conflict could potentially pull other regional powers into the fray, which would be a boon for safe haven assets like gold. Several key economic data reports are also due next week, including the Federal Reserve’s interest rate decision and a fresh initial jobless claims report on Wednesday.

U.S. retail sales and industrial production indexes are due on Tuesday, but they are expected to play only a minor role in the FOMC’s meeting, which is scheduled a day later, on Wednesday. CME FedWatch’s interest rate futures monitor saw a bit of cut-favorable action earlier this week. CME’s analysis finds a 4.1% implied probability that the Fed will move to cut interest rates by 25 basis points, up from 2.1% yesterday and 2.6% one week ago, but down from 8.4% last month. 

Gold will end the week up from Monday’s closing price. Silver will close down on the week. The gold-silver ratio is up since Monday’s close.