Gold futures rose, capping the longest rally in 10 weeks, after U.K. Defense Secretary Philip Hammond said the country may take military action if Iran carries out its threat to block the Strait of Hormuz.
Any attempt by Iran to close the waterway in retaliation for sanctions against oil exports would be “illegal and unsuccessful,” and the Royal Navy will join any action to keep shipping lanes open, Hammond said today in a speech in Washington. Gold climbed as much as 0.9 percent to a two-week high.
“Iran is gradually becoming a big source of concern, and people are worried what could happen next,” said Michael Smith, the president of T&K Futures and Options in Port St. Lucie, Florida. “Gold is gaining on the fear.”
Gold futures for February delivery advanced 0.5 percent to settle at $1,620.10 an ounce at 1:40 p.m. on the Comex in New York. The most-active contract rose for the fourth straight session, the longest rally since late October.
Earlier, the price fell as much as 0.9 percent as the dollar’s rally eroded the appeal of the metal as an alternative investment.
Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter, wrote that he has become “officially bullish” on gold after the price slumped 3.4 percent in the fourth quarter.
Silver futures for March delivery rose 0.7 percent to $29.296 an ounce on the Comex. Earlier, the price dropped as much as 1.4 percent.
On the New York Mercantile Exchange, palladium futures for March delivery fell 1.4 percent to $644.40 an ounce. Platinum futures for April delivery dropped 0.6 percent to $1,418 an ounce.