Gold Rises on Syria Bombing

Gold rose from an eight-month low in New York as investors assessed airstrikes in Syria and signs of more physical demand against the outlook for an improving U.S. economy. Silver gained from the lowest price in four years.

The U.S. and its Arab allies launched a barrage of airstrikes against Islamic State positions in Syria, while Israel shot down a Syrian fighter jet. Demand in China and India, the largest buyers, typically increases from September ahead of festive periods and the wedding season. Gold’s drop kept its 14-day relative strength index below 30 for the previous 10 days, signaling to some investors who study charts that prices may be poised to rebound.

Bullion is on course for its first quarterly loss this year, almost wiping out gains in 2014, as the Bloomberg Dollar Spot Index reached a four-year high amid signs the U.S. economy is strengthening. The Federal Reserve raised borrowing-costs projections for 2015 last week, even as it maintained a pledge to keep rates low for a considerable time.

“The metal seems to have been supported by some safe-haven buying after news emerged that the U.S. has launched airstrikes against the ISIS militants in Syria,” Abhishek Chinchalkar, an analyst at Mumbai-based AnandRathi Commodities Ltd., said in a report today. “We do not expect gains in gold to last for long. With broader conditions in the U.S. continuing to improve, we expect the dollar to maintain a firm tone.”

Gold for December delivery added 1.3 percent to $1,233.20 an ounce on the Comex in New York by 7:46 a.m. Prices reached $1,208.80 yesterday, the lowest since Jan. 2, and ended 2013 at $1,202.30. Gold for immediate delivery gained 1.4 percent to $1,232.50 in London, according to Bloomberg generic pricing.

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