The price of gold hit record highs during trading on Monday amid concerns over increased geopolitical uncertainty in the Middle East following the death of Iranian President Ebrahim Raisi. Gold is generally considered a ‘safe haven’ investment in times of uncertainty.
Raisi, the leader of the Islamic Republic, died in a helicopter crash on May 19 in the country’s northwestern East Azerbaijan province. The head of state had traveled to the border region after joining Azerbaijani President Ilham Aliyev on Saturday to inaugurate a dam.
Spot gold prices rallied to $2,449.89 per ounce in the session on Monday before pairing some gains. The surge followed a broader rally across metal markets. Wall Street is predicting that the price of the precious metal could push $2,500 per ounce in the near future.
Gold prices had previously rallied to record highs in April amid fears of a war between Israel and Iran, and it’s expected that the prospect of more instability in the region following Raisi’s death could push the precious metal even higher.
Adding to geopolitical volatility, a China-bound oil tanker was hit by a Houthi missile in the Red Sea over the weekend.
“Geographic tension environments are getting complicated,” Dick Poon, general manager at Heraeus Metals Hong Kong, told Reuters.
Some experts indicated that continued strong buying from China had also underpinned prices. Analyst expectations of interest rate cuts by the US Federal Reserve were also cited among the factors that could be boosting the price of gold.
Investors traditionally see gold as a ‘safe haven’ in times of market uncertainty to hedge risks and as a store of value. For thousands of years, bullion has been turned to amid economic instability, stock market crises, military conflicts, and pandemics.
Other precious metals also advanced on Monday, with silver surging to an 11-year high of $32.75 an ounce.