Gold Inches Higher as Investors Watch Middle East Developments

Gold prices climbed close to a two-month high on June 16, as investors looked for safer assets amid rising tensions between Israel and Iran. The metal was trading around $3,447 an ounce internationally, while in India, domestic prices crossed ₹1.02 lakh per 10 grams—setting a new high in cities like Ahmedabad.

 

What’s driving this?

The spike in gold is mostly tied to fear. Over the weekend, there were fresh missile and drone exchanges in the Middle East, raising concerns about broader instability. When that happens, investors often turn to gold because it tends to hold value when everything else feels shaky.

 

At the same time, people are watching the U.S. Federal Reserve closely. It’s meeting this week, and even though it's not expected to cut rates right away, recent soft inflation data has added to speculation that rate cuts could come later this year. That’s usually good news for gold prices.

 

Oil also jumped sharply—up 12 percent in one day—because of concerns about supply disruptions. The U.S. dollar and bond yields dipped slightly, which also helped boost gold.

 

With all this in play, analysts say gold could break past $3,500 if the situation escalates further or if the Fed hints at future rate cuts.

 

Sources: Moneycontrol, Fortune India, Mint