Gold price rises to record on Middle East tension, US economy concerns

Gold rose to a record high above $3,030 an ounce as an escalation in Middle East tensions underscored its haven appeal, and investors weighed data that fueled concern the US economy is slowing down.

Bullion climbed as much as 1.3% as Israel launched airstrikes across Gaza that Hamas said killed hundreds of people, shattering a nearly two-month ceasefire.

Traders were also digesting recent US economic data that showed consumer apprehension about the impact from President Donald Trump’s tariff measures. They’ll be on the lookout for interest-rate cues from the Federal Open Market Committee meeting that concludes Wednesday. Right now, they see high odds of three rate cuts this year. Policymakers are widely expected to keep rates steady at the conclusion of their meeting on March 19.

The gloomier outlook for both the US and global economy has underscored bullion’s role as a store of value in uncertain times. The metal is up more than 15% so far this year, extending its strong 2024 performance. Several major banks have hoisted price targets in recent weeks. 

Inflows into physically-backed gold exchange-traded funds continued for a fifth consecutive day on Monday. The amount of gold held in ETFs has risen 5% this year, after dropping for the past four years, according to data compiled by Bloomberg.

While gold has further room to run, “$3,000 was a strong resistance” in the short term, said Vasu Menon, managing director of investment strategy at Oversea-Chinese Banking Corp. “Even though it’s broken marginally above this, it may not signal a decisive break,” said Menon, who sees bullion rising to $3,100 within 12 months.

Spot gold was up 1.1% to $3,033.44 an ounce as of 12:16 p.m. in New York. Silver rose, while platinum and palladium edged lower.

(By Sybilla Gross and Yihui Xie)