Gold prices in Japan surged to a historical high of 14,088 yen (about 94.27 U.S. dollars) per gram, fueled by the ongoing turbulence in the Middle East and the yen's depreciation.
As of Thursday, gold retail prices in Japan had reached new highs for the second consecutive day. The futures price of gold has surged to 85.85 U.S. dollars per gram, making another record. Prices for silver and platinum have also seen an uptick.
A main factor contributing to the rise in gold prices is the ongoing tensions in the Middle East, which spurs investors to seek safer assets and boosts the demand for gold.
The continued depreciation of the yen against the U.S. dollar is also playing a crucial role, as it has led investors to speculate that the Japanese government may intervene in the foreign exchange market. Although the Bank of Japan has not yet taken any intervention measures, nervousness in the market has already begun to surface.
Gold prices hit record high in Japan
The Israeli military resumed strikes in southern Beirut on Wednesday after sparing the Lebanese capital for a few days, with concerns rising over possible attacks targeting the Beirut Port, a pillar of Lebanon's economy.
Israel has attacked Beirut for the first time since last Friday. Shelling hit the southern district of the Lebanese capital, which is known to be a Hezbollah stronghold.
According to an Israeli statement, the strikes targeted an ammunition depot located under a building in a residential neighborhood. Israel said it had earlier warned residents to evacuate the area. No casualties have been reported so far.
Beirut has braced for attacks after Israeli Prime Minister Benjamin Netanyahu said Israel would strike anywhere in Lebanon including the capital city. It's a major development as sources in Washington and the Prime Minister of Lebanon Nagub Miqati earlier said there was an unofficial agreement that Israel would ease strikes on the Lebanese capital.
Meanwhile, observers are bracing for the possibility that the military offensive will damage the Beirut Port.
Beirut Port is considered a major pillar of Lebanon's economy and the main channel for the flow of trade to the country.
"The Beirut Port since 1997, has been gradually increasing its revenue. In 2023 we raised 140 million U.S. dollars in revenue. After deducting 18 percent costs, the rest is delivered to the state budget. Eighty percent of trade is through Beirut Port. That's about 80 percent of the economy," said Omar Itani, chairman of Beirut Port.
According to Itani, its location in the East Mediterranean, connecting Asia and Europe, makes Lebanon one of the focal points of China's Belt and Road initiative.
"Most of our imports come from China. China is a major supplier that we depend on, just like many countries depend on Chinese products," he said.
But daily Israeli air raids that potentially endanger the port, brings back memories of the 2020 explosion, which killed nearly 220 people and injured thousands more. Dubbed "Beirut-Oshima" for its sheer devastation, the explosion not only damaged the port but the entire economy.
Hani Bohsali, who imports food products through Beirut port, said many businessmen fear the worst could happen given the significance of the port.
"There is Beirut and Tripoli. Now of course, Beirut takes the full traffic and Tripoli takes the back-up. If any of them is disrupted, we will have a logistical bottle neck. If both of them are closed, then we will have a problem. Actually, there will be no alternative in that case," said Bohsali.
Air freight, a probable alternative, is almost non-existent after all international airlines suspended flights to Lebanon. This will likely disrupt trade resulting in a hike in prices, and shortages in basic necessities, such as food and medicine.
The Lebanese hope that the port will not be targeted by the Israeli onslaught, as the economy hasn't yet recovered from the 2020 explosion. Any Israeli attacks could severely damage the country's already stricken economy.
Israel strikes Lebanese capital after days of quiet, with concerns rising over Beirut Port
