On Wednesday, the gold price climbed as much as 2$ to vault over the $1,600 ceiling for the first time in almost seven years. And this happened due to investors flocking to safe havens and after Iran launched retaliatory missile strikes against the U.S. forces in Iraq.
Then, spot gold price soared 0.8% to $1,585.80 an ounce. Prices reached their highest since March 2013 at $1,610.90 earlier in the session. And U.S. gold futures rallied 1% to $1,589.30.
In the early hours of Wednesday, Iran launched a missile attack on U.S.-led forces in Iraq. After that, there was a second round of attacks against U.S. bases in Iraq. The strike by Iran occurred a few hours after the funeral of Tehran’s top military commander Qassem Soleimani. The commander was killed in a drone strike last week, building fears of a broader war in the Middle East.
Market analyst Margaret Yang Yan stated, “Fears of uncertainty and further escalation in this military confrontation is dragging up gold prices.”
Yan also added that the attacks are definitely igniting demand for safe havens. And this is not just in gold but also yen, while they sold off equities.
In addition to that, risk aversion spiked as the disarray of the attacks dragged the financial markets. As a result, it sent Asian stocks tumbling and oil rocketing.
The U.S. Vs. Iran
The United States President Donald Trump tweeted on late Tuesday that an assessment of casualties and damage from the strikes was underway. Also, he would make a statement on Wednesday morning.
Then, people consider gold as a safe investment in times of political and economic turmoil.
Yan explained, “Gold is heavily overbought.”
Also, a pullback might happen if Trump resolves the issue diplomatically without fueling a full-blown war.
Now, the metal’s 14-day relative strength index (RSI) was about 88. And an RSI of more than 70 means that they overbought a commodity. And spot gold might break a resistance at $1,614 an ounce and goes up towards the next resistance at $1,639.
Aside from gold, palladium is also hitting a new all-time peak of $2,056.01 per ounce in the last session on sustained supply deficit. And this was last down 0.3% to $2,045.08. The autocatalyst metal hits a fresh record high for the third straight session.
Then, silver went up by 0.8% to $18.53 an ounce. This happened after touching its highest since early September at $18.85. Palladium edged 0.1% lower to $970.25.
Commodity Market: Coriander Prices
Meanwhile, coriander prices on Tuesday rose Rs 93 to Rs 6,312 per quintal in futures trade. And this was due to strong domestic demand and restricted supplies from producing belts.
Coriander on the National Commodity and Derivatives Exchange for January delivery climbed by Rs 93 or 1.45 percent. And it is currently trading at Rs 6,312 per quintal with an open interest of 7,210 lots.
Furthermore, the firm trend in the spot market and restricted supplies from producing regions are pushing up coriander prices. And this was according to some market analysts.