Gold prices soared in Asian markets as investors expressed concern on current situation in the Middle East. Many have chosen to park their savings on gold to mitigate the risks of currency devaluation.
The gold-dollar exchange rate hovered around $1,990 per troy ounce during Asian trading last week. However, prices soared and reached a one-month high of $2,579 in Pakistan.
Experts estimate that gold has spiked by around $200 per ounce to over $2,000 in recent days in the wake of the Middle Eastern crisis. It was trading at approximately $1,800 per ounce for some time prior to the start of the war.
Moreover, analysts believe that a pause in the conflict may lead to a correction of $50-60 per ounce from its current price of nearly $1,993 per ounce. However, if the crisis escalates, gold prices may rise to $2,100-2,200 per ounce. On the other hand, if the war concludes,buillon prices would likely fall sharply to pre-war levels, around $1,800 per ounce.
Impact on gold prices
Gold prices could experience downward pressure amidst a heightened risk appetite. This scenario could emerge when investors cast out the precious metal in favor of more risk-driven assets. A US Fed attempt to not hike interest rate in December will likely drive this trend.
Gold saw an uptick in demand as a safe haven amid the Israel-Hamas conflict. However, traders could adjust their stance, anticipating a reduced risk premium as concerns ease about the conflict expanding across the broader Middle East. The evolving situation, along with diplomacy efforts to broker a ceasefire, are being closely monitored for further adjustments.
Source: economymiddleeast