Gold price could see new highs if Middle East conflict worsens, says Newmont CEO

Gold prices could well reach new record highs soon should the Hamas-Israel war continue to intensify, according to the world’s biggest gold miner’s chief executive Tom Palmer.

“There are certainly scenarios that you could see it pushing up through record highs,” Newmont CEO Palmer said in an interview with Financial Times on Monday.

Since Hamas militants launched their attack on Israel, the price of gold has shot up considerably as investors fled to for the safety of the metal seen as a store of value during times of geopolitical uncertainty.

By late October, the spot price had surpassed the key $2,000/oz. level, last seen in May of this year during the fallout of the US regional banking crisis. It has since settled within the $1,980-$1,990/oz. range, for a rise of nearly 10% over a one-month period.

“The things we’ve seen play out over the last few weeks is one of the factors behind gold enjoying the levels that it’s sitting at now,” Palmer told FT.

Bullion’s rise also comes as the US Federal Reserve reaches the end of its interest rate hiking cycle. Investors’ view that rates would be higher for longer was a key factor that subdued gold prices prior to the Israel-Hamas conflict.

“When I think about gold price, I think that there’s a lot of fundamentals that are sitting behind the levels that’s been holding for the better part of this year,” Palmer said. “And unfortunately there are events playing around the world that leads to [the] gold price going up.”

Palmer’s interview comes on the same day that his company closed a $15 billion deal to buy Australia’s Newcrest Mining, solidifying the company’s place as the world’s biggest gold miner.

“This transaction is the largest in the gold industry and among the largest in the mining industry,” he said. “Half of the world’s top gold mines will be in our portfolio.”

Read More: Newmont plans to sell mines after Newcrest acquisition