Bengaluru: A stronger currency and worries about the US Federal Reserve’s monetary policies limited gains, but safe-haven demand amid an intensifying Middle East conflict drove up gold prices on March 5. At 11:55 a.m. Saudi time, spot gold was up 0.6 percent at $5,168.43 an ounce. At $5,179.20, US gold futures for April delivery were up 0.9 percent. After Iranian rockets forced millions of Israelis into bomb shelters, Israel conducted a massive wave of strikes on Tehran on March 5 that it said were directed at Iranian government infrastructure.
On the one hand, the prolonged Middle East war might increase demand for gold as a safe haven. However, the possibility of a protracted period of higher energy costs that eliminates rate cuts and increases the likelihood of rate hikes could be limiting future benefits, according to Hamad Hussain, climate and commodities economist at Capital Economics.
After momentarily falling from three-month highs, the US dollar gained roughly 0.3 percent as the war’s aftermath shook world markets and kept sentiment shaky. Fears of inflation were heightened as oil prices continued to rise due to worries about the availability of energy.
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