Gold climbed back above $5,100 per ounce on Wednesday after dropping more than 4% in the previous session, as investors closely monitored escalating tensions in the Middle East. The US–Israeli confrontation with Iran entered its fourth day, with Israel on Tuesday striking a building where clerics had gathered to select a new Supreme Leader.
US President Donald Trump expressed concern that the attacks could pave the way for an Iranian leadership no less troubling than the previous regime, highlighting the uncertainty surrounding the conflict’s direction. He also announced plans for US naval escorts and insurance backing for oil tankers and other vessels transiting the Strait of Hormuz, in an effort to calm energy and shipping markets.
Gold and other metals had slumped on Tuesday as the US dollar strengthened amid fears that higher energy prices could fuel inflation, leading investors to reconsider the Federal Reserve’s likely policy trajectory.
