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Gold and silver prices jumped more than 1% on Monday as investors fled to sheltered assets after an attack on Saudi oil facilities raised concerns as to global energy supply and increased tensions in the Middle East.
Spot gold jumped 1.27% to $ 1,507.40 an ounce, while gold futures in the US rose 0.83% at $ 1,512.1. The gold-backed SPDR Gold Trust Exchange Fund fell 0.82% to $ 140.15, with 874.51 tonnes of gold in trust on Friday.
Like gold, silver is considered a safe haven investment, but metal is also used in the production of consumer electronics products as well as in the industrial sector, such as solar panels. . Spot money gained 2.96% to $ 17.94 an ounce.
The decision came after Saudi Arabia halted half of its oil production on Saturday after a series of drone strikes on the world's largest oil processing facility. The attack was claimed by Houthi rebels from Yemen and the Trump government accused Iran.
The shutdown is expected to affect nearly 5.7 million barrels a day of crude production, according to Saudi Aramco. This represents about 5% of world oil production. In August, Saudi Arabia produced 9.85 million barrels a day, according to data from the US Energy Information Administration.
The British Energy Minister said that these attacks had also resulted in a halt in gas production, which is expected to reduce by 50% the supply of ethane and natural gas liquids.
US crude and brent prices jumped more than 9% every Monday morning during Asian times.
The attack has raised tensions in the Middle East after the United States blamed Tehran for the blows and described the attack as "an unprecedented attack on global energy supplies." For his part, US President Donald Trump said the United States was "locked and loaded," but his administration is waiting for Riyadh to determine who triggered the strikes before taking action. Iran rejected these accusations as "meaningless".
In addition, the US Federal Open Market Committee is due to meet on Tuesday and Wednesday and markets expect the central bank to lower interest rates by a quarter of a point.
Global growth prospects remain moderate in the context of the ongoing trade war between the United States and China, which could potentially support the demand for safe haven assets. Chinese Premier Li Keqiang said in a recent interview that it was "very difficult" for the world's second largest economy to maintain a growth rate of 6% or more.
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