Spot gold climbs on Syria jitters
The spot gold price briefly rose above $1,430 an ounce to a three-and-a-half-month high on Wednesday on safe-haven buying as the United States and its allies looked set to launch military strikes on Syria.
While U.S. futures settled lower on the day, bullion rose for a fifth consecutive session as Syrians braced themselves for what U.S. officials described as plans for multi-national strikes that could last for days, in response to last week's gas attack that killed hundreds of civilians in a rebel-held suburb of Damascus.
A one-percent rise in U.S. crude futures on fears that any action against Syria could widen into a regional Middle East conflict also increased gold's inflation-hedge appeal.
"We are seeing the risk profile for the credit market shift in favor of gold in the near term until the contour of the Syria crisis is better understood," said Ed Lashinski, director of global strategy and execution for RBC Capital Markets' futures group.
Spot gold recently was up 0.1 percent at $1,416.86 an ounce, having earlier hit $1,433.31, its highest price since May 14.
U.S. gold futures for December delivery settled down $1.40 an ounce at $1,418.60, with trading volume about 10 percent below its 30-day average, preliminary Reuters data showed.
After tumbling to a three-year low of $1,180 on June 28, the price of gold has now rallied 21 percent in the last two months. Some analysts said gold looks vulnerable to profit taking, as its 14-day relative strength index (RSI) rose for a fifth day to 71 on Wednesday. A reading above 70 is considered overbought.
For more information on precious metals, please click here.