PR: Gold rises towards US$1,400 as Syria tensions rise
Gold edged higher in light trading as traders focused on the latest developments in Syria.
Spot gold was up by almost US$3 at US$1,395 as reports of a US-Israeli missile test in the Eastern Mediterranean ratcheted up the tension again.
Gains, though, were capped by a surge in the dollar, which hit a month’s high against a basket of currencies. The spot gold price generally moves in the opposite direction to the US currency.
Gold also got a minor boost from an upgrade to its short-tem price target by US stockbroker Goldman Sachs.
“While our medium-and long-term outlook for the price of gold has not changed, we make adjustments to our 2H13 price forecasts given the recent bounce in the gold price (14% since July 1, 2013),” said the broker.
It believes the recent uptick is due to investors positioning themselves for an increase in inflation rates and the uncertainty in Syria.
Goldman’s forecast for the second half of 2013 is US$1,388/oz against US$1,300/oz previously, though its bearish view on the gold remains unchanged.
The broker expects a continued improvement in economic activity in the US, while central bank gold buying will not be sufficient to offset steady declines in holdings held through exchange traded funds.
Elsewhere, silver rose to US$24.36, while platinum gained US$8 to US$1,525.
