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KUWAIT: Kuwaiti jeweler Mohammad Fadhel displays a gold bar at his shop in downtown Kuwait City on May 20, 2024. - Photo by Yasser Al-Zayyat
KUWAIT: Kuwaiti jeweler Mohammad Fadhel displays a gold bar at his shop in downtown Kuwait City on May 20, 2024. - Photo by Yasser Al-Zayyat

Gold hits record as Iran shock boosts support

LONDON: The price of gold hit a record high Monday as the shock death of Iranian President Ebrahim Raisi in a helicopter crash boosted support for the precious metal seen as a haven investment. Copper also struck an all-time peak and silver jumped to the highest level in more than 11 years — with markets generally gaining from a brighter economic outlook. Gold had already hit a series of record highs this year.

Asian and European stock markets began the week higher, having recently struck all-time peaks along with indices on Wall Street, where the Dow ended above 40,000 points for the first time on Friday. Wall Street opened flat with the Dow sliding back below 40,000 points. The metals are priced in the dollar, which has come under pressure recently from expectations that the US Federal Reserve will soon start to cut interest rates as inflation cools.

Gold struck a record $2,450.07 an ounce Monday, while copper’s all-time high stood at $11,104 per ton. Raisi was confirmed dead on Monday after search and rescue teams found his crashed helicopter in a fog-shrouded western mountain region, sparking mourning in the Islamic republic. Foreign countries had been closely following the search at a time of high regional tensions over the Gaza war raging between the Zionist entity and Hamas since Oct 7.

“Gold and copper have hit record highs, (and) silver jumped to an 11-year high... after the death of Iran’s president in a helicopter crash,” noted Neil Wilson, chief market analyst at Finalto trading group. “There is a clear geopolitical premium since October 7th,” he said, adding that “expectations the Fed will cut rates soon is helping”.

Analysts said market sentiment was boosted additionally by China’s plan to support its struggling property sector. “Therefore, the recent gains in metals are partly due to a weaker dollar and increased chances of a Fed rate cut, plus optimism over China,” said market analyst Fawad Razaqzada at City Index and FOREX.com. “However, the majority of the gains have been driven by inflation-hedging demand and central bank purchases,” he added.

Oil prices dipped after initially jumping on the Iran news. Investors are looking to the release Wednesday of minutes from the Federal Reserve’s May policy decision, hoping for some insight into the thinking of decision-makers. The release comes after data last week showed US inflation easing in April, reviving hopes the central bank would cut interest rates twice this year. There are also a number of companies reporting earnings, with NVIDIA centerstage on Wednesday. The company’s high-end processors have been prized by artificial intelligence companies, and the results could send the company’s shares to a new record high. – AFP

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