SINGAPORE: Gold jumped to the highest in almost four months as tensions in the Middle East flared after a US airstrike, spurring demand for haven assets.
The strike in Baghdad ordered by President Donald Trump killed Qassem Soleimani, the Iranian general who led the Revolutionary Guards’ Quds force.
Pentagon leaders had warned Thursday that the US was ready to deploy more force in Iraq if needed to defend or prevent more attacks by Iranian-backed militias.
Bullion is already building on its stellar 2019 rally as the dollar weakens, and the return of geopolitical concerns to the foreground is set to further aid prices.
Gold clinched its biggest annual gain since 2010 as looser monetary policy, unrest in regions from Chile to Hong Kong and buying sprees from key central banks and exchange-traded funds supported the haven.
“While this may be the kneejerk reaction we are seeing at present, the likelihood of further reactions cannot be ruled out, which may keep gold supported in the near term,” Jingyi Pan, market strategist at IG Asia Pte in Singapore, said in an email.
Spot bullion rose as much as 0.8% to US$1,541.11 an ounce, the highest since Sept 5, and traded at US$1,539.26 at 10.47am in Singapore. Prices are up 1.9% this week. Futures on the Comex surged as much as 1%.