Gold hits record high amid US economic worries and rising Mideast tensions.

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Gold prices have surged to a new all-time high, crossing $3,000 an ounce, as investors become increasingly concerned about the US economy and rising tensions in the Middle East. The precious metal, known for being a safe investment during uncertain times, gained value as fears of a slowdown in the US and military conflict in the region weighed on global markets.

The price of gold edged slightly higher after a 0.6% gain on Monday. This increase came after Israel launched military strikes on Hamas targets in Gaza on Tuesday, threatening to destabilize an already fragile truce. According to reports, Palestinian residents witnessed several Israeli airstrikes across different areas of the Gaza Strip. The renewed violence added to the growing demand for gold as a safe-haven asset.

Meanwhile, traders were also reacting to US retail sales data released on Monday. The report showed that retail sales rose less than expected in February, indicating weaker consumer spending. This raised concerns about a possible slowdown in the US economy. In response, yields on 10-year Treasury bonds fell, making non-interest-bearing gold more attractive to investors.

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Although the retail sales figures pointed to softer spending on goods, they did not signal a major decline. As a result, the data had little impact on traders’ expectations for interest rate cuts by the US Federal Reserve.

Despite the mixed economic signals, companies, investors, and economists are remaining cautious. Consumer confidence is falling, and there are growing signs of financial stress. The risk of potential trade wars fueled by US President Donald Trump’s policies is also adding to market uncertainty.

The worsening outlook for both the US and the global economy is making gold an even more attractive option for investors. The metal’s value as a store of wealth during times of uncertainty has been reinforced.

So far this year, gold prices have climbed by more than 14%, continuing its strong upward trend from 2024. Many major banks have recently raised their gold price forecasts for the year, expecting the metal to remain strong.

In Singapore, spot gold was up 0.1% at $3,004.19 an ounce at 9:49 a.m. after briefly crossing the $3,005 mark for the first time ever. Meanwhile, the Bloomberg Dollar Spot Index also rose by 0.1%. Other precious metals saw slight movements, with silver prices remaining flat, while platinum and palladium inched higher.

The ongoing economic uncertainty and geopolitical tensions are expected to keep gold prices elevated in the near term, as investors continue to seek safe-haven assets.

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