Gold climbs to record high as Hamas-leader death stokes geopolitical tensions

• Gold reached reached a new-all time high on Friday, topping $2,700 for the first time.
• The safe-haven asset is attracting interest after the death of a top Hamas leader.
• Geopolitical tensions have been a driving force behind gold's record-setting rally in 2024.

Gold hit another record high amid simmering geopolitical unease in the Middle East.

Futures climbed as much as 1% to $2,720 an ounce on Friday as the death of Hamas leader Yahya Sinwar late Thursday spurred renewed concerns of further geopolitical tension.

According to analysts at ING, gold investors were responding to Israel's pledge to continue fighting, rather than de-escalate, per President Joe Biden's recommendation. They've treated the precious metal as a geopolitical safe haven all year, ING said.

"Traders are seeking safety in gold this morning after Israel said it killed Hamas leader Yahya Sinwar, and Prime Minister Benjamin Netanyahu said Israel would keep fighting until all the hostages seized by Hamas last year are free, even though US President Joe Biden said it was time for the war to end," the analysts wrote.

Meanwhile, Hezbollah committed to continue fighting after Sinwar's killing, Reuters said. Iran, which backs several proxies in the region, issued a UN mission statement citing a strengthened "spirit of resistance."

FXPro senior market analyst Alex Kutsikevich noted that the metal's 2% increase this week is abnormal because it's risen alongside the dollar, even though the two assets are normally inversely correlated.

He said gold and the dollar only rise together when there's a sudden spike in demand for defensive assets — something that generally occurs geopolitical stress.

Macroeconomic conditions are also at play as investors watch to see how far interest rates may fall. Gold, which does not yield interest, benefits when borrowing costs are lower. Other factors include strong central bank buying, as well as robust demand in Asia, ING added.