(Bloomberg) – Gold rose to its highest level in more than six years when increasing tensions in the Middle East fueled geopolitical uncertainty and demand for ports. Palladium also extended profits.
The spot bars rose 2.3% to $ 1,588.13 an ounce, the highest since April 2013, and were up 1.5% to $ 1,575.36 from 7:22 a.m. in Singapore, while futures rose 2 , 5% to $ 1,590.90. Palladium even rose 1.2% to $ 2,013.90 an ounce, a new record high, while silver and platinum also rose.
The Iranian government announced that it would no longer comply with uranium enrichment restrictions after the murder of Iranian general Qassem Soleimani, while the Iraqi parliament voted to expel US troops from the country.
President Donald Trump said on Sunday to US lawmakers that he was ready to "disproportionately" beat Iran if he should take revenge on a US target as the United Nations made threats after the fatal drone attack on the Islamic Republic's most prominent military commander negotiated.
Gold is off to a rapid start in 2020, building on the largest annual profit in nearly a decade driven by a weaker dollar, lower real interest rates and the impact of the trade war on global growth.
Silver even rose 1.3% on Monday, while platinum rose 1%.
Given the air strikes in the U.S., concern over the extent to which both sides are willing to escalate the situation is likely to limit the extent to which port hedges dissolve, said Stephen Innes, chief market strategist at AxiTrader Ltd., in a note on Sunday.
“With the S&P 500 trading near an all-time high and the markets trading with a strong positive bias, gold is by far the best hedge in this environment and should attract more buyers, even those who tend not to fiddling with gold, ”said Innes.
Newcrest Mining Ltd. Trading in Sydney grew by 2.4%, while Northern Star Resources Ltd. increased by 1.7% and Evolution Mining Ltd. even increased by 4.1%.
(Updates with palladium price in the second paragraph)
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