Israel-Iran conflict drives gold market, despite strengthening US dollar
Silver hits a 13-year high. The Federal Reserve's policy decision is awaited, while analysts predict continued demand for gold amid geopolitical uncertainty.
The ongoing Israel-Iran conflict boosted gold prices on Tuesday, June 17, despite the strengthening US dollar. Silver surged to its highest level in 13 years, while President Trump is weighing the possibility of joining Israel in its ongoing airstrikes against Iran.
Gold prices in the spot market rose by 0.2% to $3,390.29 per ounce at 2.18pm Eastern Time, while US gold futures dropped by approximately 0.3% to $3,408.70. The US dollar index increased by about 0.8%, which helped reduce the demand for safe-haven assets driven by the tensions between Israel and Iran.
Senior Analyst Jim Wykoff at Kitco Metals noted, “Prices are increasing now as we await the Fed’s decision and monitor the development of the conflict in the Middle East.”
As airstrikes continue between Israel and Iran for the fifth day, US President Donald Trump expressed his desire for an “end” to the nuclear dispute with Iran, and suggested he may send high-ranking US officials to meet with the Islamic Republic.
The Federal Reserve is expected to announce its policy decision on Wednesday night, with analysts predicting the central bank will maintain the current overnight interest rate of 4.25–4.50%, unchanged since December. The low-interest-rate environment and geopolitical uncertainty are expected to make gold more attractive.
A survey by the World Gold Council revealed that central banks worldwide expect to increase their gold holdings in the next five years.
In the silver market, prices rose by 2% to $37.08 per ounce, reaching their highest level since February 2012. Citibank forecasted that silver prices could hit $40 in the next 6–12 months, driven by strong demand and limited supply.
Platinum and palladium prices also saw increases, rising by 1.6% to $1,264.08 and 1.7% to $1,046.96, respectively.
