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Gold granules are seen in a gold refiner and bar manufacturer, Valcambi SA, in the city of Balerna, in southern Switzerland, on December 20, 2012. (Reuters photo )
SINGAPORE: Gold and silver rose after a strike against Saudi oil facilities raised the possibility of US military action in retaliation in the Middle East, investors seeking for assets safe from the start of the week also to be the subject of critical political decisions from central banks, including the Federal Reserve.
Bullion jumped more than 1.5% as investors measured the consequences of the assault on the world's largest crude oil processing facility in Abqaiq and the kingdom's second largest oil field in Khurais. US Secretary of State Michael Pompeo has accused Iran of this disturbance, a charge denied by Tehran.
Gold reached its highest level in six years this month as slowing global growth led to easing central banks, with geopolitical tensions playing a secondary role in price maintenance. After cutting interest rates in July, the Fed is on the verge of reducing it at its September 17-18 meeting. After the weekend strike, President Donald Trump said that the United States was "under fire", according to audits, that Iran has organized the attack, citing the spectrum of a form of American military reaction.
"Gold and silver should be important beneficiaries of the expected security rush and the looming rounds of central bank rate cuts this week," said Jeffrey Halley, senior market analyst at Oanda Corp. "Continued escalation of tensions, or a start of hostilities in the Middle East, could bring in $ 1,600 earlier than later."
Spot ingots climbed 1.6% to $ 1,512.14 an ounce and stood at $ 1,506.15 at 10:28 am in Singapore, while silver was up 3.2% at $ 17,9938 an ounce. Platinum also advanced, while palladium dropped for a second day after breaking a record last week.
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