Gold futures up 1.5% on strong safe-haven demand

Gold bars

Gold prices rose on Thursday, driven by growing safe-haven demand amid escalating tensions in the Middle East. Meanwhile, US inflation data supported expectations that the Federal Reserve may cut interest rates.

Gold futures for August delivery climbed by 1.45%, or $48.2, to $3,391.7 per ounce.

Spot gold prices also increased by 0.65%, or $21.81, to $3,374.08 per ounce at 8:24 PM Makkah time.

Meanwhile, the US dollar index, which measures the performance of the greenback against a basket of six major currencies, fell by 0.3% to 98.39 points.

Silver futures for July delivery rose 0.6% to $36.48 per ounce. Spot platinum prices jumped around 1.55% to $1,272.98, while spot palladium prices dropped 1% to $1,069.74 per ounce.

Geopolitical uncertainty intensified following US President Donald Trump's statement that Americans would be evacuated from the Middle East due to growing risks, further boosting demand for safe-haven assets.

Gold also found support from data showing that US annual consumer price inflation rose to 2.4% in May from 2.3% the previous month, compared to forecasts of an acceleration to 2.5%.

This bolstered hopes that the Federal Reserve will cut interest rates in its September meeting, with total rate cuts expected to reach 50 basis points by the end of the year, according to Reuters.