Gold gets dragged into selloff as share slide jolts investors
Gold fell as much as 1.2% in early Asian trading, dragged lower by weakness in global stocks, which offset concerns over heightened tensions in the Middle East.
Spot bullion — which rallied close to a record last week — dropped toward $2 425 an ounce as Asian shares tumbled at the week’s open. Growing concern about a deepening US economic slowdown weighed on markets, with traders worried the Federal Reserve may be behind the curve on interest-rate cuts.
The selloff eclipsed anxiety that a very tense situation in the Middle East could spiral into a direct conflict between Israel and Iran. Israel is preparing for a possible attack from Iran and its militias in retaliation for assassinations of Hezbollah and Hamas officials.
The precious metal remains one of this year’s best-performing major commodities, with gains aided by central-bank buying, Asian consumers and, in recent months, expectations the Fed is getting close to cutting rates. While gold typically benefits from haven demand during times of financial and geopolitical stress, it can weaken when risk-asset selloffs are particularly sudden or pronounced.
Bullion for immediate delivery fell 0.7% to $2 426.19 an ounce at 9:05 a.m. in Singapore, despite a retreat in 10-year Treasury yields. The precious metal rose more than 2% last week, topping $2 477, within $10 of its record.
Among other metals, silver slumped more than 1% toward $28 an ounce, while palladium was on course for the lowest close since February, and platinum dropped.
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