Gold makes history with new record highs

Gold prices rose on Monday in European trade to fresh record highs, as prices stabilize above the $2300 barrier on strong haven demand as geopolitical tensions in the Middle East mount.

Such considerations overshadowed a recent surge in US 10-year treasury yields, which usually pressure non-yielding assets such as gold. 

Gold is approaching the psychological level of $2400 amid strong demand from global central banks and major investment funds. 

Prices Today 

Gold prices rose over 1% to $2337 an ounce, a record high, with a session-low at $2303. 

Prices rallied 1.7% on Friday, the eighth profit in nine days, scaling a fresh record high. 

The yellow metal rallied 4.3% last week, the third weekly profit in a row, and the largest since early March on strong haven demand.

Haven Demand 

Massive investments are pouring into gold as investors seek safe havens amid mounting Middle East tensions.

Israel today announced the withdrawal of some of its troops from southern Gaza to redeploy them in preparations for the Rafah ground attack. 

At the same time, the Islamic Republic of Iran is preparing for a counterattack against Israel after the latter's alleged attack on the Iranian consulate in Syria. 

US Yields

US 10-year treasury yields rose 0.9% on Monday, scaling a five-month high at 4.454% and pressuring non-yielding assets. 

The developments come after strong US labor data last Friday, which blew past expectations. 

The US economy added 303 thousand new jobs in March, beating estimates of 212 thousand.

The unemployment rate fell to 3.8% from 3.9% in February, while average earnings rose to 3.0%. 

Such data showed the US economy ended the first quarter on solid ground, and will likely delay the dates of upcoming Fed interest rate cuts.

US Rates 

Following the data, the odds of a Fed interest rate cut at the June policy meeting tumbled from 60% to 48%. 

Now investors await crucial US inflation data later this week, which could change the odds of future policy moves by the Fed. 

Gold Performance Projections

JPMorgan's analysts foresee gold prices hitting $2500 an ounce this year.

Goldman Sachs' analysts project a minimum price target of $2300 an ounce for this year, anticipating policy easing by the Federal Reserve.

The SPDR

Gold holdings at the SPDR Gold Trust fell by 6.04 tonnes on Friday to a total of  826.41 tonnes, the lowest since March 13.