Background on Key Players and Context
The price of gold soared on Friday, driven by demand for a safe-haven asset, following escalating tensions between Israel and Iran. This surge brought gold near its all-time high, with spot gold rising 1.3% to $3,428.10 per ounce and U.S. gold futures gaining 1.5% to $3,452.80 per ounce.
Israel launched a series of attacks across Iran on Friday, targeting nuclear facilities and missile factories. These strikes could be part of a prolonged operation to prevent Iran from developing a nuclear weapon.
President Donald Trump implied that Iran instigated the attack by defying a U.S. ultimatum in nuclear talks aimed at curbing its nuclear program.
Economic Factors Supporting Gold’s Rally
Weaker-than-expected U.S. inflation data earlier in the week further bolstered gold prices, reinforcing expectations of interest rate cuts by the Federal Reserve. Goldman Sachs reaffirmed its forecast that central banks’ robust purchasing will drive gold prices to $3,700 per ounce by the end of 2025 and $4,000 per ounce by mid-2026. Bank of America anticipates gold could reach $4,000 per ounce within the next 12 months.
Performance of Other Precious Metals
Silver for immediate delivery dipped 0.3% to $36.27 per ounce but gained 0.9% for the week. Platinum plunged 5.9% to $1,219.03 but rose 4.8% for the week. Palladium fell 1.3% to $1,041.51 and declined 1.1% for the week.
Key Questions and Answers
- What caused the recent surge in gold prices? The escalating tensions between Israel and Iran, along with demand for a safe-haven asset like gold, drove prices up.
- What are the potential long-term gold price forecasts? Goldman Sachs predicts gold could reach $3,700 per ounce by the end of 2025 and $4,000 per ounce by mid-2026. Bank of America expects gold to potentially hit $4,000 per ounce within the next 12 months.
- How did other precious metals perform during this period? Silver gained 0.9% for the week, platinum rose 4.8% for the week despite a 5.9% drop, and palladium fell 1.1% for the week after a 1.3% decline.
