Gold rose to a two-month high in London as fighting in the Middle East and higher oil prices spurred demand for the metal as a haven and hedge against inflation. Silver and platinum also gained.
Crude-oil futures increased on speculation about supply disruptions in the Middle East, the world’s largest producing region, after Israeli air strikes in the Gaza strip. On Dec. 26, a U.K. holiday, gold jumped 2.6 percent, the most in two weeks, as Palestinian militants launched a rocket attack on Israel after a truce expired Dec. 19.
“There is potential for more conflict to come and therefore it’s had an impact on gold and oil,” said Simon Weeks, a London- based managing director at ScotiaMocatta, the metal-trading unit of Canada’s Bank of Nova Scotia. “This is not bearish news.”
Gold for immediate delivery jumped $13.14, or 1.5 percent, to $882.44 an ounce as of 9:37 a.m. in London and earlier gained to $890.49, the highest since Oct. 10. Futures for February delivery advanced $12.10, or 1.4 percent, to $883.30 in electronic trading on the Comex division of the New York Mercantile Exchange. Oil climbed as much as 6.2 percent.
The metal may climb to $935 an ounce by the end of next week on haven demand in the Middle East and from investors who consider gold a better alternative to Treasuries, according to James Moore, an analyst at TheBullionDesk.com in London. The yield on 10-year notes was 2.14 percent, according to BGCantor Market Data.
“Treasury yields are low and interest rates are at multi- year lows,” Moore said. “If you’re looking to safe haven assets, gold has a pretty good proven track record.” Gold has climbed 5.8 percent this year, heading for an eighth consecutive annual gain.
Gold Fixing
The London “fixing” price used by some mining companies to sell production is closed on Jan. 1 for New Year’s Day and there is no afternoon pricing on Dec. 31, said Stewart Murray, chief executive officer of the London Bullion Market Association. Fixings will be back to normal on Jan. 2.
Among other precious metals, platinum for immediate delivery jumped $28, or 3.1 percent, to $919 an ounce and earlier traded up to $935, the highest since Oct. 16.
Silver for immediate delivery rose 21 cents, or 2 percent, to $10.91 an ounce and palladium increased $5.25, or 3 percent, to $182.25 an ounce.
