Gold Prices Surge Amid Middle East Conflict and Safe-Haven Demand

Gold prices surged over 1% on Wednesday in response to escalating Middle East tensions, rebounding from a more than one-week low as investors sought safe-haven assets. Spot gold increased by 1.5% to $5,164.42 per ounce by 0701 GMT, while U.S. gold futures for April delivery rose by 1% to $5,174.30.

This rebound comes after bullion prices fell over 4% on Tuesday to their lowest point since February 20, affected by a strong dollar and diminishing chances of a rate cut amid escalating inflation concerns. Despite recent setbacks, gold has shown resilience as geopolitical uncertainties and economic policy unpredictability persist, according to Tastylive's Ilya Spivak.

Meanwhile, oil and gas prices have dramatically increased due to the U.S.-Israeli war on Iran, which has disrupted energy supplies in the region. Tehran's actions have led to the closure of the Gulf route, heightening inflation worries and complicating monetary easing strategies, as noted by OCBC strategist Christopher Wong.