Gold Rally Stalls as Rate-Hike Pressure Tests Haven Demand Amid Mideast War

Since the war between the United States and Iran began on Feb. 28 local time, gold, a leading safe-haven asset, has generally lost momentum, unlike in many previous wartime episodes. Traditionally, demand for gold rises during war because it has no issuing authority and is seen as preserving value even if a state collapses. But after this Middle East conflict began, gold has moved up and down with daily developments while investors appear cautious about adding exposure. A sharp rise in international oil prices after the outbreak of war has increased pressure on major economies to raise benchmark interest rates, reducing the appeal of non-yielding gold. Analysts also point to profit-taking after last year’s strong rise in gold prices. Source: rss.donga.com