Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold surged 1.2% to close above $2,462, the highest level in nearly two weeks, as escalating turmoil in the Middle East rallied oil prices and stoked demand for safe havens. Silver rose 1.5% to finish at $27.92 an ounce.

Defense Secretary Lloyd Austin announced today that the US is sending a guided missile submarine into the Middle East in response to threats from Iran and Hezbollah to avenge the assassination of a top Hamas leader in Tehran last month. Additional combat aircraft and warships had already been dispatched to the region.

The escalation comes one day after an Israelis airstrike destroyed a school in northern Gaza, killing dozens of civilians.

Benchmark 10-year Treasury yields fell back to 3.9% on the growing fears of a wider war. Falling yields support gold by decreasing the opportunity cost for holding it instead of bonds for safety. The dollar was virtually flat.

Also boosting bullion, US benchmark WTI crude jumped 4.2% to more than $80 per barrel on concerns that rising geopolitical turmoil may disrupt supplies from the Middle East. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

Expectations of coming rate cuts from the Fed have railed the metal in recent weeks, setting the stage for additional gains if important economic reports this week reinforce the dovish rate view. Wholesale inflation and consumer inflation data are due on Tuesday and Wednesday, respectively, and retail sales on Thursday.

Platinum and palladium picked up 1.8% and 0.3%, respectively,

At the New York spot close: gold gained 30.30 to $2,462.49; silver climbed 42 cents to $27.92; platinum picked up $16.70 to $946.60; and palladium added $3, to $899.40 an ounce.