XAU/USD: Gold Charges Toward Record High on Escalating Middle East Tensions

Precious metal added more than 1.2% on Tuesday and stayed well-bid near $2,650 early Wednesday.

• Gold XAUUSD took off Tuesday after the latest sign of Middle East war escalations shook investor confidence and led to a surge of safe-haven demand. Bullion prices jumped more than 1.2% on the day, hitting a session high of $2,673, about $22 below the all-time record high of $2,685 set on September 26. Early on Wednesday, prices were more subdued as markets were looking to find out whether war tensions have eased a little.
• Iran launched a surprise attack on Israel in a move that widened the conflict between Israel on the one hand and Hamas and Hezbollah on the other hand. Tehran fired scores of ballistic missiles at Israel hours after Israeli Prime Minister Benjamin Netanyahu had ordered a ground offensive in Lebanon targeting Hezbollah. “Iran made a big mistake tonight,” Netanyahu said Tuesday, “and it will pay for it.”
• Naturally, wars prompt traders to seek out safety as they run from risk. Gold is perceived to be that safe place for markets to park their cash as they wait out geopolitical tensions. The unnerving conflict in the Middle East has supported the upside narrative for gold from the first days of clashes. Now, analysts fear that an ever closer all-out war could potentially upend the global market’s flow.