Gold jumps 2% as the dollar declines and tensions escalate in the Middle East

Gold prices

Jimmy Dutta, a market analyst at Nemo.Money, said that the markets had returned to the traditional cautious approach after the wave of liquidation of positions and the strength of the dollar in recent days, indicating that the cessation of the rise of the dollar and US Treasury bond yields reduces the opportunity cost of holding gold and silver, according to Reuters.

He added that the properties The safe haven of gold and silver can shine again under these circumstances.

Gold fell by more than 4% on Tuesday, after investors rushed towards the dollar, at a time when inflationary fears strengthened expectations of postponing interest rate cuts, which reduces the attractiveness of the non-yielding metal.

At the same time, silver rose by 4.5% to $85.74 an ounce, after losses of more than 8% in the previous session.

Surge Military

US forces continued their intense attacks on Iran, while Israel launched a “broad wave” of strikes on Wednesday targeting Iranian missile sites and air defense systems.

Asian stocks fell sharply, with investors exiting intense bets on the shares of electronic chip companies, amid fears that the expansion of the war in the Middle East would lead to an oil shock that would raise inflation and delay interest rate cuts.

According to the “Feed Watch” tool of the CME Group. Sunset, investors widely expect that the US Federal Reserve will keep interest rates unchanged at the conclusion of its upcoming meeting on March 18.

Lynn Tran, chief market analyst at XS.com, said that if the military campaign is prolonged or expands in the region, demand for safe havens may continue to support gold above the level of $5,000 an ounce, and may pave the way for a retest of the recent peaks.

Metals Precious

In other precious metals, platinum rose by 3.7% to $2,159.45 per ounce, while palladium rose 3% to $1,697.08.