Investing.com - Prices of the safe-haven rose more than 1% on Monday in Asia as U.S.-Iran spurred safe-haven appetite.
Gold Futures for February delivery on New York’s COMEX gained 1.7% to $1,578.15 by 12:01 AM ET (04:01 GMT). It is now near the highest level in more than six years.
The yellow metal jumped around 2% on January 3 after a US airstrike on Baghdad killed a top Iranian commander in the attack, triggering safe-haven buying in precious metals.
Following the attack, Iran’s government said it would no longer abide by any limits on its enrichment of uranium, while U.S. 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.
Rising geopolitical concerns are likely to keep the momentum going in gold, analysts said.
Gold “has entered 2020 with strong momentum,” Gavin Wendt, senior resource analyst at MineLife Pty in Sydney, said in an interview with Reuters. “When you factor in ongoing uncertainty with respect to U.S.-China trade talks and heightened security issues with Iran, gold really is a no-brainer.”
In other news, New York Fed President John Williams said on Sunday that it was important for the U.S. Federal Reserve to stick to its 2% inflation target.
"There's been a process of going through the stages of grief about a low neutral rate," said Williams. "These factors are basically the hand we’ve been dealt for the next five to 10 years."
"If inflation continues to underrun our target levels like it has, this downward trend in inflation expectations will likely continue with inflation expectations falling well below target levels," he said.
Gold has historically been an excellent hedge against inflation, because its price tends to rise when the cost of living increases.