Gold prices soar to near 7-year high amid US-Iran conflict

New Delhi: In the wake of Iran's retaliatory missile strikes against the US forces in Iraq, Gold prices soared as much as 2 per cent on Wednesday to vault over the $1,600 ceiling for the first time in nearly seven years, as investors flocked to safe havens.

Spot gold jumped 0.8% to $1,585.80 per ounce by 0250 GMT. Prices hit their highest since March 2013 at $1,610.90 earlier in the session. US gold futures rallied 1% to $1,589.30, according to Reuters report.

In the early hours of Wednesday, Iran launched a missile attack on US-led forces in Iraq, followed by a "second round" of attacks against US bases in Iraq.

The strike by Iran comes hours after the funeral of Tehran`s top military commander Qassem Soleimani whose killing in a US drone strike last week has raised fears of a wider war in the Middle East.

US President Donald Trump said in a tweet late on Tuesday that an assessment of casualties and damage from the strikes was underway and that he would make a statement on Wednesday morning.

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The metal`s 14-day relative strength index (RSI) was around 88. An RSI above 70 indicates a commodity is overbought. Spot gold may break a resistance at $1,614 per ounce and rise towards the next resistance at $1,639, according to Reuters technical analyst Wang Tao.

FUNDAMENTALS

- Spot gold climbed 1.9% to $1,603.21 per ounce by 0056 GMT. Prices hit their highest since March 2013 at $1,610.90 earlier in the session. U.S. gold futures rose 2% to $1,605.80.
- The jump in the price of what`s viewed by investors as a safer asset in times of political and economic uncertainty came after Iran`s missile attack on US-led forces in Iraq early on Wednesday. The attack came hours after the funeral of an Iranian commander whose killing in a US drone strike has raised fears of a wider conflict in the Middle East.
- The United States confirmed reports of the attack by Iran and said President Donald Trump had been briefed and the situation was being monitored.
- On the trade front, in a move that would make it tough for Beijing to meet import commitments in its `Phase 1` trade deal with the United States, China will not increase its annual low-tariff import quotas for corn, wheat and rice to accommodate additional purchases of U.S. farm goods.
- Elsewhere, palladium hit a fresh all-time peak of $2,056.01 an ounce earlier in the session on a sustained supply deficit and was last down 0.6% to $2,040.57.
- Silver jumped 1.2% to $18.60 per ounce, after hitting its highest since late September at $18.71, while platinum advanced 0.3% to $973.95.

Among other precious metals, palladium hit a fresh all-time peak of $2,056.01 an ounce earlier in the session on sustained supply deficit and was last down 0.3% to $2,045.08.

The autocatalyst metal touched a fresh record high for the third consecutive session.

Silver rose 0.8% to $18.53 per ounce, after hitting its highest since early September at $18.85, while platinum edged 0.1% lower to $970.25.

(With Reuters Inputs)