Gold prices jump to highest in six years

Singapore: Gold’s rally shows no signs of abating.

The metal surged to the highest level in six years as fresh US sanctions on Iran added to uncertainty in global markets, with semi-official Iranian Students News Agency reporting that the diplomatic path with Washington is closed “forever,” citing foreign ministry spokesman Abbas Mousavi.

Investors are also looking to the G-20 summit this weekend where Presidents Donald Trump and Xi Jinping are scheduled to meet to discuss trade, although US officials are downplaying expectations, insisting America wasn’t prepared to compromise on demands for meaningful Chinese economic reforms. Another key event on traders’ watchlist is Federal Reserve Chairman Jerome Powell’s speech in New York later Tuesday, which will touch on monetary policy.

Bullion’s been on a tear this month as the dollar weakened after the Fed opened the door to an interest rate cut and other central banks also pivoted to a more dovish stance. Investors are taking note — pouring into exchange-traded funds backed by the precious metal and boosting net long positions in US gold futures and options. Morgan Stanley said gold is its top commodity pick on a six-month view as the uncertain macroeconomic outlook adds to its appeal.

“The global capital market’s mood is shaky due to the fear of the unknowns and it’s this uncertainty that will continue to provide the jet fuel for an already high-octane gold market,” Stephen Innes, managing partner at Vanguard Markets Pte, said in a note.

A significant withdrawal by investors from the US dollar, which intensified after last week’s Fed policy meeting, “further adds to the glimmering gold market appeal,” Innes added.

Spot gold climbed as much as 1.4% to $1,439.21, the highest since May 2013, and traded at $1,436.33 at 12:46 pm in Singapore. A gauge of the US dollar hit a three-month low.

In other precious metals, silver rose 0.3%, platinum lost 0.1%, and palladium fell 0.2%.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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