Gold up on Syria bombing, weaker dollar
Gold rose from an eight-month low in New York Tuesday, adding 1.4% to reach $1,232.20 an ounce, as investors assessed U.S.-led air strikes in Syria and signs of more physical demand against the outlook for an improving U.S. economy.
The U.S. and five of its Middle Eastern allies launched an attack on extremist fighters in Syria on Monday night, with missiles fired from Navy ships, U.S. Air Force fighters, armed drones and allied aircraft. The strikes hit nearly two-dozen targets in parts of Syria controlled by Islamic State militants, the U.S. military said Tuesday.
Geopolitical tension, which often drives prices of precious metals higher as a safe haven, helped gold rise off the $1,208.36 settled at in the previous session, the lowest since January 2. However, the yellow metal has yet to sustain those gains, slipping back to $1,220.87.
U.S. gold futures gained $14.80 to $1,225.50 an ounce.
“The metal seems to have been supported by some safe-haven buying after news emerged that the U.S. has launched airstrikes against the ISIS militants in Syria,” Abhishek Chinchalkar, an analyst at Mumbai-based AnandRathi Commodities Ltd., told Bloomberg. “We do not expect gains in gold to last for long. With broader conditions in the U.S. continuing to improve, we expect the dollar to maintain a firm tone,” he added.
A weaker dollar, which retreated against the euro and the yen, also pushed gold up. The ICE Dollar Index, which tracks the dollar against a basket of international currencies, was recently down 0.3% at 84.50.
Other precious metals followed gold’s lead higher. Palladium and platinum each rose for the first time in five sessions. Nymex palladium for December delivery, the most active contract, was recently up 1% at $811.45 a troy ounce.
Nymex platinum rose 0.6% at $1,338.30 a troy ounce, while Comex silver was up 0.1% at $17.795 an ounce.