Gold of 24 karat bars are seen at the United States West Point Mint facility in West Point, New York.
London: Gold hit a five-month high yesterday as investors looking for safety piled into the precious metal after the United States fired cruise missiles at a Syrian airbase, escalating tensions with Russia and Iran.
Gold was up 0.9 percent at $1,262.86 an ounce by 11:36 GMT after climbing to its highest since November 10 at $1,269.28, putting it on track for a fourth week of gains in a row. US gold futures climbed 0.9 percent to $1,264.9 an ounce.
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.
“When you look back at the historical record, these bids for gold based on ‘edge-of-the-world’ or wars tend to be short-lived and are followed by profit taking,” Societe Generale’s head of Metals Research Robin Bhar said.
Bhar said an important indicator for gold would be US non-farm payrolls data which is expected to show a rise of 180,000 jobs in March.
An increase above the consensus is likely to reinforce expectations of higher US interest rates, which could pressure gold.
Higher interest rates reduce investor appetite for the non-interest bearing precious metal. Higher US rates may also mean a stronger US currency, which makes dollar-denominated gold more expensive for holders of other currencies, potentially weakening demand.
Gold was also supported by technicals yesterday.
“Gold has broken the 200-day moving average intraday and has tested its upper resistance at $1,264, the February 28 high,” said Jeffrey Halley, senior market analyst at OANDA.
“A daily close above these levels can open a technical move towards $1,300 with support now at $1,250.”
Spot silver rose 0.4 percent to $18.31 an ounce, after touching $18.47, the highest since February 27. Platinum inched up 0.3 percent to $958.5 while palladium also added 0.3 percent to reach $805.00.
