Safe-Haven Gold Gains As Middle East Worries Mount

(January 28, 2024 - Harshit Verma, Reuters)

Jan 29 (Reuters) - Gold prices rose on Monday as escalating tensions in the Middle East lifted bullion's safe-haven appeal, while moves were limited as traders awaited the U.S. Federal Reserve chair Jerome Powell's remarks this week for cues on interest rate trajectory.

Spot gold was up 0.4% at $2,025.99 per ounce by 0403 GMT.

There is enough instability still in the Middle East to keep investors interested in gold as part of a safe-haven play, said Tim Waterer, chief market analyst at KCM Trade. We have seen Safe-haven Gold buying after a terrorist strike in Jordan killed three U.S. soldiers.

News on China's Evergrande being ordered to liquidate is a dent to risk sentiment, which is also keeping gold supported, Waterer said, adding that the immediate upside is capped given the Fed meeting is just around the corner.

Gold is considered a safe store of value amid political and economic turmoil.

Traders are betting on six quarter-point rate cuts for 2024 in the U.S., up from five cuts a week ago, according to LSEG's interest rate probability

Lower interest rates decrease the opportunity cost of holding bullion.