Gold Hits New All-Time High Amidst Geopolitical Tensions in the Middle East

Another week and another all-time high price for gold futures. The precious metal hit a fresh new all-time high price of $2,350.00 per ounce as geopolitical unrest and investor concerns over inflation catapulted the demand for gold higher. Gold has extended its rally from the first quarter and has already gained nearly 5.0% during the first week of April. 

Hawkish sentiment from Fed speakers this week contradicted a speech from Fed Chairman Jerome Powell. Powell reiterated his belief that the Fed will cut rates three times in 2024, but his peers were less dovish. Minnesota Federal Reserve Bank President Neel Kashkari was the most hawkish, citing that he believes if inflation remains sideways the Fed does not even need to cut rates this year. Kashkari’s words caused some major volatility in equities with the major indexes posting their worst session of 2024. 

Adding to that volatility for stocks was rising geopolitical uncertainty in the Middle East. Tensions between Israel and Iran reached a fever point on Thursday. The belief in an Iranian retaliation was so strong that the United States needed to get involved which led to President Biden ordering an immediate ceasefire in Gaza. Anytime the Middle East is involved, the initial reaction is seen through crude oil prices. Oil futures spiked, which added to the further pressure on stocks and likely led to a flight to safety in gold. 

Gold has been the strongest asset class this week along with Silver. Equities rebounded on Friday but the Dow fell for four of the five days, registering its worst week of trading this year. Bitcoin has also been consolidating and continues to meet strong resistance above. The world’s largest crypto continues to trade within range and is down by about 2.6% weekly. 

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For the week ending April 5th, gold COMEX June 2024 futures contracts closed at $2,349.10 and silver COMEX May 2024 futures contracts settled at $27.60.

Precious Metals Stocks and ETFs Weekly Performance

Gold mining stocks had a strong week as they were finally bid up by investors. The Kitco MIGL Gold Miner’s Index rallied with 16 of the 20 components closing higher on Friday. New Gold Inc (NYSE: NGD), Gold Fields Ltd ADR (NYSE: GFI), and Agnico-Eagle Mines Ltd (NYSE: AEM) were some of the biggest gainers during the session. Meanwhile, the world’s largest gold miners performed well with Barrick Gold (NYSE: GOLD) adding nearly 5.0% and Freeport McMoran (NYSE: FCX) gaining more than 4.0% with big bullish option flows for June and July. 

The Van Eck Gold Miners ETF (GDX) and the Van Eck Junior Gold Miners ETF (GDJX) extended their rallies as well. GDX gained 4.77% and GDJX jumped by 6.0%. Spot gold ETFs were also on fire with both the iShares Gold Trust (IAU) and the SPDR Gold Trust (GLD) gaining more than 3.0%. GLD also saw some major bullish call flow for later this year as institutional investors are anticipating gold to continue its rally.

Silver stocks were equally as bullish with Silver futures also hitting a new 52-week high on Friday. The Kitco MISI Silver Miners Index saw 8 of the 9 components close the week in positive territory. The iShares Silver Trust (SLV) was another popular asset this week gaining nearly 8.0% for the week and also hitting a new 52-week high. SLV was yet another favourite of institutions this week with major bullish call sweepers hitting the tape as well. 

What’s in Store Next Week for Precious Metals?

All eyes will be on the Middle East this weekend as increased tensions could be a cause of more market volatility next week. Another big week ahead for inflation data as the CPI and Core CPI for March are released, with further speeches from Fed speakers Bowman, Goolsbee, and Bostic following the CPI report.