Gold up 1% as attack on Saudi facilities boosts safe-haven assets
By Asha Sistla (Reuters) - Gold gained 1% on Monday after attacks on oil facilities in Saudi Arabia fuelled concerns of a further escalation in Middle East tensions and pushed investors towards safe-haven assets.
By Asha Sistla
(Reuters) - Gold gained 1% on Monday after attacks on oil facilities in Saudi Arabia fuelled concerns of a further escalation in Middle East tensions and pushed investors towards safe-haven assets.
Spot gold was up 0.9% to $1,502.30 per ounce at 11:34 a.m. EDT (1534 GMT).
U.S. gold futures rose 0.7% to $1,510.30.
"The Saudi Arabian situation is driving gold prices higher as people are looking for havens, (watching out) for any negative fallout, both economic and political," said George Gero, managing director at RBC Wealth Management
"Gold will continue to be steady on the upside if there's an escalation (in the Saudi Arabia situation)"
Drone attacks on two plants at the heart of Saudi Arabia's oil industry on Saturday triggered a surge in oil prices and a slide in wider financial markets.
While the Yemeni Houthi group claimed responsibility for the attack, a senior U.S. official indicated Iran was behind it.
Gold is often used as a safe store of value during times of political and financial uncertainty.
"This is the biggest geopolitical flashpoint to impact the world marketplace in quite some time ... Sharply higher oil prices may throw a monkey wrench into central banks' monetary policies, which had heretofore been leaning very easy," Jim Wyckoff, senior analyst with Kitco Metals, wrote in a note.
Central banks globally face increasing pressure to dole out monetary support for flagging economies as the U.S.-China trade war hurts trade and business sentiment.
Markets are awaiting policy decisions from the U.S. Federal Reserve and Bank of Japan on Wednesday.
Lower U.S. interest rates put pressure on the dollar and bond yields, increasing the appeal of non-yielding bullion.
Meanwhile, data from China showed growth in industrial production slipped to its lowest level in 17-1/2 years amid the spreading pain from a trade war.
However, a 0.4% rise in the dollar made gold more expensive for holders of other currencies, limiting bullion's advance.
Silver jumped 2.8% to $17.92 an ounce, while platinum fell 1.5% to $934.22.
Palladium fell 0.2% to $1,602.74 per ounce after hitting a record high of $1,626.81.
Platinum and palladium are reacting to the jump in crude prices since both metals are used not just as autocatalysts, but also to crack crude oil into heating oil and gasoline, said RBC Wealth Management's Gero.
(Reporting by Asha Sistla in Bengaluru; Editing by Paul Simao)
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