Gold Rallies on Haven Demand as U.S. Missiles Hit Syrian TargetsBy and
Metal supported by report on fewer-than-estimated U.S. jobs
‘The situation in Syria continues to deteriorate,’ Eliseo says
Gold rallied to the highest in almost five months after the U.S. launched a missile strike against Bashar al-Assad’s regime in Syria. The metal was supported by a report that showed the American economy added fewer jobs than economists expected.
Spot gold climbed as much as 1.5 percent to $1,270.87 an ounce in New York, the highest intraday since Nov. 10, and broke through the 200-day moving price average, indicating upward momentum. Bullion later pared gains as traders looked past the geopolitical situation and the flight to quality eased.
The decision to strike Syria marks a reversal for U.S. President Donald Trump, who during his campaign faulted past leaders for getting embroiled in conflicts in the Middle East. Secretary of State Rex Tillerson told reporters that “steps are under way” to mobilize a coalition to remove Assad, a Russian ally. The American attack was condemned as an “act of aggression against a sovereign state” by Russian President Vladimir Putin.
“There’s clearly an element of risk aversion in the market, so you have buying of gold,” said Georgette Boele, a currency strategist at ABN Amro Bank NV in Amsterdam. The metal has been close to the 200-day moving average for some time and “needed something like this to break through.”
The U.S. action followed a gas attack in Syria’s Idlib province earlier this week. Announcing the strike, Trump said: “There can be no dispute that Syria used banned chemical weapons.” Syria has denied responsibility.
Miners were boosted by the rise in gold, with Randgold Resources Ltd. climbing 4.3 percent in London, while AngloGold Ashanti Ltd., the world’s third-largest miner of the metal, climbed 3.8 percent and Gold Fields Ltd. rose 6.3 percent in Johannesburg.
The American economy added 98,000 jobs in March, trailing the 180,000 median forecast in a Bloomberg survey of economists, a government report showed Friday. The employment data comes at the end of a week when strong private payrolls data and weak automaker sales gave conflicting signals on the strength of the economy.
“We saw a further move higher on the disappointing payrolls number,” said Brad Yates, head of trading for Elemetal, one of the biggest U.S. gold refiners. “You’ve got people doing safe-haven seeking. Gold broke through its 200-day moving average. That has some shorts covering and potentially a new leg higher.”
Gold futures for June delivery rose 0.3 percent to settle at $1,257.30 on the Comex. The metal has climbed 9.2 percent this year. Spot gold was up 0.3 percent at 3:33 p.m. in New York.
Silver fell on the Comex, while platinum increased and palladium declined on the New York Mercantile Exchange.
“The situation in Syria continues to deteriorate, with news of a U.S. missile strike,” Jordan Eliseo, chief economist at Australian Bullion Co., said in an email. “It’s no surprise for gold to catch an immediate safe-haven bid.”
— With assistance by Ranjeetha Pakiam