Gold prices reached highest levels in nearly seven years, recording about USD 1,580 an ounce, the highest since April 2013, supported by increased demand for safe havens and increased geopolitical tensions between the US and Iran.
The price of an ounce of gold in spot trading rose 1.5 percent to US$1574.14, and earlier in the session, it rose 1.8 percent to US$1,580. On Friday, the ounce of gold exceeded the level of USD 1,550 after the death of the commander of the Quds Force in the Iranian Revolutionary Guards, Qassem Soleimani, and the deputy head of the Popular Mobilization Organization, Abu Mahdi Al-Muhandis, in an air strike carried out by the US military in Baghdad. In a statement to KUNA, precious metals expert, Rajab Hamed, said Monday, that the gold ounce is expected to exceed the level of US$1,700, adding that the rise depends on the way to address the tension between Washington and Tehran.
Hamed added that gold is the safe haven for investors during the turmoil of economic stagnation, wars and geopolitical tensions. He stated that in times of war, the gold price increases compared to other currencies and commodities due to the high demand for it, which means high political and economic tensions.
He pointed out that there are other factors that contributed to the rise in gold during the last period, like the trade war between the US and China as well as the policy of reducing interest for the US Federal Reserve. These factors also include the Brexit file, the weakening of the US dollar, the absence of risk appetite for investors in stock and bond markets, as well as the central banks’ adherence to gold purchases as strategic reserves, he added.
Hamed noted that the East Asian markets are considered one of the largest drivers of gold activity, especially China and India, as they account for two-thirds of the activity globally. On the local market, Hamed said that it recovered a little last week, as resale movement for bullion appeared, indicating that a kilo of 24-carat gold reached 15,200 Kuwaiti dinars (about US$51,000), and the highest price for gold in seven years. An ounce is one of the units of mass measurement, is used in a number of different systems of units of measurement, and is equal to 28,349 grams, while it is equal as a unit of measurement for precious metals 31,103 grams.