Safe haven rally in gold

Gold rose on rate-cut optimism and tensions in the Middle East. Gold rose on signs the Fed will cut interest rates this year, while rising geopolitical tensions in the Middle East have boosted safe-haven demand. Bullion closed 1 percent higher on Monday as U.S. policymakers weighed on dovish statements. Richmond Fed President Thomas Barkin said he expected higher interest rates to slow the economy further and cool inflation toward the central bank’s 2 percent target, while New York Fed President John Williams said there would be rate cuts but the decision on when would depend on the rate cuts. Investors were also watching recent developments in the Middle East, which boosted gold’s status as a haven, as Israel rejected a Hamas-backed ceasefire offer to end the conflict in Gaza. Gold has gained 13 percent this year and hit consecutive all-time highs in April, even as stubborn inflation figures have added to uncertainty about when the U.S. central bank will cut interest rates. Higher yields also added to the headwinds, with the Treasury bond market posting its worst month of the year in April last week. Spot gold rose 0.2 percent to $2,327.35 an ounce as of 8:46 a.m. Singapore time. The Bloomberg Dollar Spot Index was little changed. Silver fell, while palladium and platinum rose.