Gold Advances Boosted by Safe Haven Demand

Gold advanced to a three-week high as unrest in the Middle East spurred demand for a haven.

U.S. President Barack Obama authorized air strikes in Iraq and Russia banned agriculture imports from the U.S. and European Union in retaliation over sanctions stemming from the conflict in Ukraine. Israel said a cease-fire with Hamas forces in Gaza was violated hours before it was due to expire.

“Pretty much a perfect storm for gold prices,” David Govett, head of precious metals at Marex Spectron Group in London, said in a note today. “Resolutions seem a long way off. It is going to be all about headlines today.”

Gold for December delivery increased 0.6 percent to $1,319.70 by 7:10 a.m. on the Comex in New York on trading that was 85 percent higher than the 100-day average for this time of day, data compiled by Bloomberg show. Prices touched $1,324.30 an ounce, the highest since July 18. Bullion for immediate delivery rose 0.5 percent to $1,318.58 an ounce in London, according to Bloomberg generic pricing.

Fighting in Ukraine and the Middle East sparked a 9.7 percent rise in gold this year, with prices up 1.9 percent this week, heading for the first weekly gain in four weeks.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza