Gold’s taking aim at $1,300 an ounce. The metal has rallied to the highest level since November as investors position themselves for the outcome of the UK election and potential drama of former FBI Director James Comey’s testimony, while also tracking tensions in the Middle East.
Bullion for immediate delivery was steady at $1,293.41 an ounce at 8:55am in Singapore after rising on Tuesday to $1,296.15, the highest level since Nov. 9, according to Bloomberg generic pricing. The gains have also been supported by a decline in the dollar, which has dropped to the lowest since October.
Gold has surged 13 per cent in 2017, eking out gains every month, and a Bloomberg survey this week signalled a further advance. The latest leg up has been supported by an increase in haven demand as UK voters head to the polls on Thursday, with the outcome set to dictate how the country handles Brexit. The same day, Comey is scheduled to appear before a Congressional panel to testify about his probe into Donald Trump campaign’s ties to Russia.
“Rising political uncertainty continues to provide support for gold,” Australia & New Zealand Banking Group Ltd said in a note, citing Comey and the UK polls. “This comes as the diplomatic crisis in the Middle East involving Saudi Arabia and Qatar intensifies. This has seen a continued rise in safe-haven buying of the precious metal. A weaker dollar is also playing its part.”
Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed ties with Qatar on Monday citing its support for rival Iran and for extremist groups. The crisis pits US allies against each other, disrupting trade, flights and business activity in one of the world’s most strategically important regions.
Gold may end the year at $1,350 an ounce, according to the median estimate of 15 people surveyed at a conference organised by the Singapore Bullion Market Association this week. Twelve respondents were bullish, citing the global geopolitical uncertainty that continues to weigh on market sentiment.