KUWAIT CITY: A jeweller arranges gold bars at his shop on Monday.—AFP
KUWAIT CITY: A jeweller arranges gold bars at his shop on Monday.—AFP

LONDON: The price of gold hit a record high on Monday as the shock death of Iranian President Ebrahim Raisi in a helicopter crash boosted support for the precious metal seen as a haven investment.

Copper also struck an all-time peak and silver jumped to the highest level in more than 11 years — with markets generally gaining from a brighter economic outlook.

Gold had already hit a series of record highs this year.

Asian and European stock markets began the week higher, having recently struck all-time peaks along with indices on Wall Street, where the Dow ended above 40,000 points for the first time on Friday. All three Wall Street indices rose to strike new intraday highs.

Copper and gold are priced in US dollars, which has come under pressure recently from expectations that the US Federal Reserve will soon start to cut interest rates as inflation cools.

Gold struck a record $2,450.07 an ounce on Monday, while copper’s all-time high stood at $11,104 per tonne.

“Gold and copper have hit record highs, (and) silver jumped to an 11-year high... after the death of Iran’s president in a helicopter crash,” noted Neil Wilson, chief market analyst at Finalto trading group.

“There is a clear geopolitical premium since October 7th,” he said, adding that “expectations the Fed will cut rates soon is helping”.

Analysts said market sentiment was boosted additionally by China’s plan to support its struggling property sector.

“The market is sensitive to these two metals because gold is considered an inflation hedge and a safe haven, and because copper is a metal that is linked to global growth,” said Kathleen Brooks, research director at XTB.

Oil prices dipped after initially jumping on the Iran news.

Brent futures fell two cents to $83.96 a barrel by 11:10am EDT (1510 GMT), while US West Texas Intermediate (WTI) crude rose five cents, or 0.1pc, to $80.11.

Investors are looking to the release Wednesday of minutes from the Federal Reserve’s May policy decision for some insight into the thinking of decision-makers.

The release comes after data last week showed US inflation easing in April, reviving hopes the central bank would cut interest rates twice this year.

There are also a number of companies reporting earnings this week, with Nvidia centre-stage on Wednesday. The company’s high-end processors have been prized by artificial intelligence companies, and the results could send the company’s shares to a new record high.

Published in Dawn, May 21st, 2024

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