Gold prices have gained more than 6% after falling in mid-August to their lowest since January 2017 at $1,159.96 an ounce. “Now we have risen above the 100-day moving average (around $1,224), which is key, so maybe we can see it rise to $1,250, which could be the next target,” said Commerzbank analyst Carsten Fritsch.
Gold prices today in global markets nudged up after hitting their highest in over three months in the previous session, with international political and economic uncertainty underpinning safe-haven demand for the metal. Spot gold was up 0.1% at $1,231.27 an ounce at 0102 GMT. On Tuesday, it touched its highest since July 17 at $1,239.68. US gold futures were down 0.2 percent at $1,234.20 an ounce.
“Gold is supported by rising risk aversion washing through the markets and that is reflected in falling equity markets worldwide,” said Societe Generale analyst Robin Bhar. “Political uncertainty in Italy, geopolitical risks in the Middle East, Turkey and elsewhere had some safe-haven flows coming in and extending the rally in gold prices that began a couple a weeks ago.”
World shares sank towards their lowest level in a year on Tuesday, pressured by disappointing corporate earnings, Saudi Arabia’s diplomatic isolation to a brewing spat over Italy’s finances. The European Commission decided to reject Italy’s 2019 budget and asked Rome to present a new document within three weeks.
“We have a whole series of situations in connection with Saudi Arabia and Russia, and trade tensions between U.S. and China, and that has been having a knockdown impact on equities and in turn providing support to gold prices,” said Capital Economics analyst Ross Strachan.
Holdings at the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.3 percent to 747.88 tonnes on Monday.
Investor flows into bullion, often considered a safe store of value during times of economic and political uncertainties, also continued to increase.
Meanwhile, palladium was up 0.2 percent at $1,124.40 an ounce.
Among other precious metals, silver rose 0.8% to $14.73, while platinum was up 0.9 percent at $827.24.
Used mainly in emissions-reducing autocatalysts for vehicles, palladium has gained some 7% so far this year to hit a record $1,150.50 an ounce, about $100 away from the price of gold. A combination of factors, from tight supplies and large deficits to resurgent interest from speculative investors, has kept the platinum group metal (PGM) on the boil.
