Gold price surges to month high on Middle East tensions

[Redator]

Gold prices rallied to a one-month peak on Thursday as simmering Middle East tensions, coupled with increased momentum for a Federal Reserve rate cut, drove the metal higher.

Spot gold advanced 1.0% to $3,388.20 an ounce as of 10:40 a.m. ET, closing in on the $3,400 mark for the first time since early May.

Meanwhile, US gold futures rose by 1.9% to $3,406.60 an ounce in New York.

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The rally comes amid renewed geopolitical concerns in the Middle East after reports of Israel considering an attack on Iran while the latter is set for nuclear deal talks with US. Gold, a safe-haven asset, surged after news of the possible military strike broke Wednesday evening.

Also supporting gold were fresh data that showed a marginal increase in US producer prices in May, indicating that tariffs have yet to hit businesses. This followed Wednesday’s cooler-than-anticipated monthly Consumer Price Index (CPI) report.

Based on the latest economic signals, traders now see an 80% chance of a Fed rate cut in September, followed by another one in October, according to Reuters.

On the tariff front, Trump said on Wednesday he would be willing to extend a July 8 deadline for completing trade talks with countries before higher US tariffs take effect.

(With files from Reuters)