Tags: gold | price | iran | metal

Gold Holds Near 6-Year High With Iran's Next Moves in Focus

Gold Holds Near 6-Year High With Iran's Next Moves in Focus
(Badboo/Dreamstime)

Tuesday, 07 January 2020 03:10 PM

Gold held near the highest level in more than six years on demand for the metal as a haven as investors watch for Iran’s next move in the showdown with the U.S.

Bullion, which climbed 2.4% over the previous two sessions to approach $1,600 an ounce, advanced even after a gauge of U.S. service activity rose to a fourth-month high in December. The S&P 500 headed for its second drop in three days.

“The tensions with Iran are everything right now,” Peter Thomas, a senior vice president at Chicago-based broker Zaner Group, said by phone. “What you have to do is discount everything that’s going on and just watch Iran now, that’s really percolating under the surface. The numbers that come out, unless they are really earth-shattering, which they haven’t been, I think you’re going to see continued support” for gold prices, he said.

Bullion investors have been in thrall to developments in the Middle East after a U.S. drone strike killed a powerful Iranian general. The Islamic Republic is assessing 13 scenarios to respond and even the weakest of those options would be a “historic nightmare” for the U.S., the head of Iran’s national security council was cited as saying by the semi-official Fars news agency.

“Elevated geopolitical risks across the heart of the Middle East should support a stronger gold price environment this winter,” Citigroup Inc. analysts including Aakash Doshi and Tracy Liao said in a note. The bank cautioned that it’s difficult to trade gold purely from the angle of heightened military tensions, but noted there are “bullish fundamental tailwinds” in place.

Spot gold rose 0.4% to $1,572.64 an ounce at 1:46 p.m. in New York. On Monday, the metal hit $1,588.13, the highest since April 2013.

Gold futures for February delivery rose 0.4% to settle at $1,574.30 on the Comex.

History suggests that gains driven by geopolitical tensions alone may be short-lived, Macquarie Group Ltd. strategists including Marcus Garvey said in a report.

“To illustrate this with the examples of Gulf War 1, the World Trade Center attack of 9/11 and last year’s strike on Saudi Aramco’s Abqaiq facility, gold prices initially jumped higher but were ultimately unable to sustain their newly elevated level,” they said.

Still, there are several other factors in place that are supportive for gold prices, Credit Suisse analysts including Fahad Tariq said in a note this week. Those include a weaker dollar, dovish central bank policies and uncertainty over a more comprehensive deal between Washington and Beijing.

In other precious metals, palladium hit a fresh record, with spot prices reaching $2,050.63 an ounce on Tuesday. Silver and platinum also gained.

© Copyright 2020 Bloomberg News. All rights reserved.

   
1Like our page
2Share
Markets
Gold held near the highest level in more than six years on demand for the metal as a haven as investors watch for Iran's next move in the showdown with the U.S.
gold, price, iran, metal
439
2020-10-07
Tuesday, 07 January 2020 03:10 PM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved