World Economy

Gold Hits 5-Month High

Gold Hits 5-Month HighGold Hits 5-Month High

Gold rose more than 1% on Friday to hit a 5-month high as investors sought safe-haven assets after the United States launched cruise missiles against a Syrian air base, potentially escalating tensions with Syrian ally Russia.  

Spot gold had risen 1% to $1,263.53 per ounce. It earlier climbed as much as 1.4% to its highest since November 10 at $1,269.28, and was on track for a fourth straight week of gains.  US gold futures also climbed 1% to $1,266 an ounce, PTI reported.

“Clearly this raises the stakes and we expect to see gold prices continuing to push higher in the short-term, at least until there is some clarity around whether this is a one-off or develops into something more,” said Australia and New Zealand Bank analyst Daniel Hynes.

Stocks fell and safe-haven bonds and the yen jumped in Asia on Friday after the missile strike.  The dollar fell 0.2% against the safe-haven Japanese yen to 110.54.

From a technical perspective, gold has struggled to break above its 200-day moving average in previous sessions but broke out above that key technical level intraday and has tested its upper resistance at $1,264, the Feb. 28 high.

Gold is often used as a hedge against political and financial uncertainty and security risks. It has benefited alongside other assets considered safe, such as the yen and US Treasury bonds.

Analysts say this support is also unlikely to be sustained as the market shifts its attention back to the elections in France and monetary policy.



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