Gold prices rise on Middle East tensions

Gold prices have risen again in the international market due to Middle East tensions. Reuters reported that the increase in prices is due to increased demand for the precious metal as a safe investment amid geopolitical uncertainty.

Reuters reported that gold prices are also on track to increase for the first time in five consecutive months on a monthly basis. According to analysts, buyer activity around $4,000 per ounce and ongoing tensions in the Middle East are supporting the gold market.

Spot gold prices fell 0.5 percent to $4,076.53 per ounce on Friday (July 31). However, the price rose about 0.7 percent throughout the week and the total increase in July was about 1.8 percent. At the same time, the price of gold futures for August delivery in the United States also fell 0.5 percent to $4,079.60 per ounce.

Tim Waterer, chief market analyst at KCM Trade, said that gold prices were under pressure on Friday due to investors taking profits after the previous day's price increase and the recovery of the US dollar. However, the $4,000 per ounce level is acting as strong support. Buyers are returning to the market as soon as the price drops to this level.

The US dollar strengthened by about 0.3 percent on Friday after a big drop on Thursday. The strong dollar makes gold relatively more expensive for international buyers.

Meanwhile, the US Federal Reserve kept interest rates unchanged at its meeting on Wednesday. Fed Chairman Kevin Warsh did not give any clear indication of future policy steps. However, the market now assesses the probability of an interest rate hike in September as 63 percent.

BCA Research said in a report that even if the Strait of Hormuz crisis subsides in the future, the multipolar world order, the slowdown in globalization and the US fiscal imbalance will support the gold market in the long term.

Along with the rise in gold prices, other precious metals also rose. Spot silver fell 0.5 percent to $58.70 an ounce. Platinum fell 1.2 percent to $1,639.77 and palladium fell 0.2 percent to $1,301.50.