Gold hit a fresh record high of $2,288/oz amid increased safe haven demand

Gold shines again, as the price of the yellow metal recorded another record-high of $2,288/oz on Wednesday morning, driven by the increased haven demand after an escalation in the Middle East tension, coupled with the uncertainty over U.S. interest rates.

Gold, Daily chart

Despite the rally of the U.S. dollar to 5-month highs against the major peers due to surging Treasury yields which tracked hawkish comments from top Federal Reserve officials, the dollar-denominated gold managed to attract fresh investors.

The surging geopolitical concerns and the increased haven demand helped gold prices largely power past the Fed-led dollar and yield’s pressure, and the increased concerns over higher for longer U.S. interest rates.

The DXY-U.S. dollar index and the T-yields rose to multi-month highs this week after several Fed officials addressed that sticky inflation and strength in the U.S. economy and labour market could potentially delay the Fed’s plans to cut interest rates.

The bullish momentum on the safe-haven yellow metal has been supported by geopolitical tensions that were ratcheted up following the Israeli strike on the building next to Iran's embassy in Syria's capital last Monday.

Meanwhile, silver, the other precious metal, has also benefited from the surging haven demand, together with the improved manufacturing growth in China (Source: www.reuters.com), climbing to a 13-month high of $26,50/oz.

The improving economic conditions in the world’s largest silver importer are very bullish for the price of the metal as 50% of the annual demand comes from industrial use due to silver's physical strength, brilliance, malleability, and ductility (Source: www.bullionvault.com).