"Gold advanced for a second consecutive session as renewed geopolitical strains reinforced demand for safe-haven assets. Despite ongoing diplomatic efforts, tensions in both the Middle East and Eastern Europe have intensified, casting doubt on the viability of current peace talks. This persistent fragility continues to embed a geopolitical risk premium into global markets, underpinning bullion's appeal. At the same time, demand for gold remains strong as central bank accumulation continues and ETF inflows return, even at elevated price levels."
"Thinner liquidity conditions, during the Lunar New Year holiday in China, may also amplify price swings. However, further upside could be tempered by uncertainty surrounding US monetary policy. The latest Federal Reserve minutes revealed a divided committee, with some officials open to the possibility of a return to policy tightening if necessary, while others signalled readiness to ease if conditions deteriorate."
Gold prices rose for a second session as heightened geopolitical tensions increased safe-haven demand and added a risk premium to markets. Intensified conflicts in the Middle East and Eastern Europe undermined confidence in peace prospects and supported bullion’s appeal. Central bank accumulation and renewed ETF inflows sustained demand despite high prices. Reduced liquidity during China’s Lunar New Year may magnify price swings. Divergent Federal Reserve views introduced uncertainty about future policy direction. Upcoming US inflation readings, especially the PCE, will be crucial: disinflation could prompt rate-cut expectations, while persistent inflation could increase volatility and downside pressure on gold.
Read at London Business News | Londonlovesbusiness.com
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