Gold price gains 1% following rise in Middle East tensions

Spot gold was 0.9% higher at $2,405 per ounce by 2:30 p.m. ET, its biggest intraday gain since July 16.

Gold prices gained the most in two weeks on Tuesday as traders sought safety in the precious metal after Israel struck Beirut’s suburbs in response to a weekend attack.

Spot gold was 0.9% higher at $2,405.00 per ounce by 2:30 p.m. ET, its biggest intraday gain since July 16. US gold futures crossed the $2,450 mark in New York, up 1.0% at $2,451.10 per ounce.

Gold’s rise follows an Israeli attack on the Lebanon capital as retaliation for a rocket strike in the Golan Heights on Saturday that killed 12 people. The metal, which has gone up by over 15% this year, traditionally gains value during times of geopolitical uncertainty.

Fed expectations

The precious metal wavered earlier in the day as traders parsed through fresh US data while awaiting a flurry of central-bank events in coming days, including a Federal Reserve policy meeting Wednesday.

Data on Tuesday showed US consumer confidence rose in July on an improved outlook for the economy, while job openings in June came in above forecast.

The Fed is expected to hold benchmark rates at the highest level in more than two decades this week, and traders will be closely watching for any hints that the start of policy easing is near. Policymakers in Japan and the UK will also meet, as traders look for signs of rate cuts in both economies.

Gold hit a record earlier this month as Asian investors ramped up demand for physical bars in the over-the-counter market. It was the precious metal’s best second quarter in data going back at least 25 years, according to the World Gold Council.

This year’s US presidential election has also started to spur interest in bullion. Gold-backed exchange-traded funds have expanded by about 44 tons in July, putting them on track for the biggest increase in more than two years, the WGC said.

(With files from Bloomberg)