Gold price hits month-high on Mideast violence
Gold climbed by as much as $21 an ounce on Monday as the metal’s status as a safe haven asset is once again renewed amid escalating conflict in the Middle East.
Gold for delivery in December was trading $16, or 1%, higher at $1,731.60 in New York in late trade after earlier reaching a high of $1,735.50 as Israeli and Palestinian fighting extends into another bloody day prompting investors to seek the relative safety of gold.
MarketWatch quotes Sonny Tahiliani, managing director of consultancy firm MacroMoves in New York, who said the conflict was one of the main drivers for gold which settled at a one-month high:
“Israel is ‘cutting the grass’ again,” which is putting a bid under gold, said Tahiliani, likening Israel’s approach to security as a problem without end.
Reuters reports gold was also helped by positive talks between Republicans and Democrats over the looming “fiscal cliff” in the US in January when more than $600 billion worth of spending cuts and tax increases are triggered that would put the country’s economy in danger of sliding back into severe recession:
“Overall, some of the underlying things are only starting to heal in the economy and it appears that will keep monetary policy accommodative, which will reflect in higher gold prices,” said Axel Merk, chief investment officer of Merk Funds, which has about $600 million in assets under management.