(Bloomberg) -- Gold rose to the highest level in more than six years as rising tensions in the Middle East stoked geopolitical uncertainty and demand for haven assets. Palladium also extended gains.
Spot bullion climbed as much as 2.3% to $1,588.13 an ounce, the highest level since April 2013, and traded 1.5% higher at $1,575.36 as of 7:22 a.m. in Singapore, while futures gained as much as 2.5% to $1,590.90. Palladium jumped as much as 1.2% to $2,013.90 an ounce, a fresh record high, while silver and platinum also gained.
Iran’s government said it would no longer abide by any limits on its enrichment of uranium following the killing of Iranian General Qassem Soleimani, while Iraq’s parliament voted to expel U.S. troops from the country.
President Donald Trump told U.S. lawmakers on Sunday he was prepared to strike Iran “in a disproportionate manner” if it retaliates against any U.S. target, as the nations traded threats following the deadly drone attack on the Islamic Republic’s most prominent military commander.
Gold is having a roaring start to 2020 and building on the largest annual gain in almost a decade, driven by a weaker dollar, lower real rates and the trade war’s effects in curbing global growth.
Silver advanced as much as 1.3% Monday, while platinum rose as much as 1%.
In the wake of the U.S. airstrikes, fears over just how far both sides are willing to escalate the situation will likely limit the extent to which haven hedges unwind, Stephen Innes, chief market strategist at AxiTrader Ltd., said in a note Sunday.
“With the S&P 500 trading near an all-time high and given the markets have been trading with strong positive risk bias, gold is by far the best hedge in this environment and should attract more buying even from those who tend not to fiddle with gold,” Innes said.
Newcrest Mining Ltd. rose as much as 2.4% in Sydney trading, as Northern Star Resources Ltd. gained as much as 1.7% and Evolution Mining Ltd. advanced as much as 4.1%
(Updates with palladium price in second paragraph)
