Gold prices were higher by 1 percent last Tuesday and investors are looking for safe haven assets as security and political uncertainties rising over the Middle East, French referendum and North Korea.
Geopolitical tensions rose when Western nations were merged by allies from the Middle East in an urge to set aside Syrian President Bashar al-Assad after a chemical attack in the country on the previous week. This along with concerns on the result of the upcoming presidential election in France strengthened the demand for safe-haven assets, like gold, on anxious investors.
According to a precious metals analyst at Natixis Bernard Dahdah, uncertainties surrounding the Middle East have yet to withdraw and other geopolitical stories can be put together, which can potentially support the price of the bullion. He added that buying the asset will not influence the long run of the yellow metal.
U.S. gold futures added $20.30 to finish at $1,274.20 an ounce; it was up by 10 percent year-to-date. Spot gold was higher by 1.50 percent to $2,273.06 an ounce.
In other news, the Federal Reserve is planning to lift interest rates slowly so as to maintain its healthy growth without firing up the economy. An interest rate hike is good for the gold due to it lifts the bullions opportunity cost.
Palladium added 20.9 percent at $804.75 per ounce. Platinum was higher by 3.26 percent at $966.50 per ounce. Spot silver rose by 2 percent at $18.27 per ounce. The spread amid platinum and gold touches its highest by $318.23 on October last year.
SPDR Gold Trust holdings gained 0.21 percent to 838.26 tons on Monday from Friday’s 836.49 tons.