Gold Rises as Conflicts Stokes Rally in Commodity Market
Gold futures rise 1.5% to $2,343.6 per ounce on the back of rising geopolitical tensions more than offset robust U.S. nonfarm payroll data. Generally, commodity market trends positively amidst tensions in the Middle East. This raised prices of crude oil to $91 per barrel, according to latest data.
Likewise, silver price climbed by as much as 2.9% to $27.0 an ounce as tensions in the Middle East and trade disruptions push the market toward safe haven assets.
In particular, analysts point to Israel’s suspected airstrikes Monday on an Iranian diplomatic building in Syria–an escalation of a year’s long shadow war between the countries. EU to Invest €37m in Nigeria’s Power Sector-Ambassador
The safe haven potential of gold more than makes up for U.S. job growth being significantly stronger than analysts expected, which feeds into market concerns that Federal Reserve interest-rate cuts might not be imminent.
Gold prices are closely linked to rates, with higher rates diminishing the precious metal’s appeal.
U.K. gilt yields rise, tracking U.S. Treasury yields, after the U.S. non-farm payrolls were stronger than expected, raising the possibility of the U.S.
Federal Reserve has been keeping interest-rates high for longer than markets have been anticipating. The U.S. added 303,000 jobs in March, well above the 200,000 jobs forecast by economists in a WSJ poll.
“The blockbuster 303,000 increase in non-farm payrolls in March supports the Fed’s position that the resilience of the economy means it can take its time with rate cuts,” Capital Economics chief North America economist Paul Ashworth says in a note.
The 10-year gilt yield rises to 4.068%, up from 4.035% before the release of the U.S. jobs data.
