November 16, 2015 / 3:00 AM / 2 years ago

PRECIOUS-Gold rises on safe-haven bids after Paris attacks

* Gold rises from near 6-year low hit last week
    * Paris attacks send equities lower
    * Rallies could be short lived -analyst

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, Nov 16 (Reuters) - Gold jumped 1 percent on
Monday, moving away from a near-six-year low, as investors
sought safety in the metal following Friday's deadly attacks in
Paris.
    Spot gold rose 1.2 percent to $1,095.77 an ounce by
0645 GMT, after earlier hitting a session high of $1,097.01.
U.S. gold futures rose more than 1 percent to a session
high of $1,097. 
    In the first 10 minutes of trade, just under 3,000 lots
changed hands, almost 10 times the 300-lot average for the
opening 10 minutes over the past two months, according to
Reuters calculations.
    Multiple attacks in Paris on Friday killed more than 130
people, prompting France to launch air strikes in Syria against
Islamic State, which claimed responsibility for the attacks.
 
    At a G20 summit in Turkey, U.S. President Barack Obama vowed
to step up efforts to eliminate Islamic State and prevent it
carrying out attacks like those in Paris. EU leaders urged
Russia to focus its military efforts on the radical Islamists.  
    "Safe-haven buying following the terrible events in Paris
over the weekend has taken gold higher this morning," said MKS
Group trader Sam Laughlin.
    Global uncertainty should help gold trade higher this week
with targets extending to $1,095 and $1,100, he said.
    Asian shares and U.S. stock futures were lower and the euro
skidded to a 6-1/2-month low on Monday in the wake of the Paris
attacks. 
    Gold is typically seen as a safe-haven asset during times of
uncertainty. Persistent weakness in stocks could further boost
bullion.
    Tracking gold, silver, platinum and palladium
 all gained over 1 percent each.
    Before Monday's gains, gold had fallen for 12 sessions out
of 13 on increasing bets that the Federal Reserve would hike
U.S. rates next month. It hit a near-six-year low last week.
    Rising rates tend to weigh on gold, as they lift the
opportunity cost of holding non-yielding assets while boosting
the dollar. 
    The time to hike U.S. interest rates is "quickly
approaching" and the Fed should not delay for fear of an adverse
market reaction or uncertainty over long-run economic trends, a
Fed policymaker said on Friday. 
    "For a short period, there could be some kind of rebound in
gold because of the events in Paris that might make investors
cautious," said Mark To, head of research at Hong Kong's Wing
Fung Financial Group, adding that the rallies could be short
lived as investors take profits.
    The metal faces selling pressure in the medium to long term
due to the looming U.S. rate hike and could drop to $1,050 if
the Fed raises rates in December, To said. 
     
    PRICES AT 0645 GMT    
 Metal            Last     Change   Pct chg
                                           
 Spot gold        1095.77    12.51     1.15
 Spot silver        14.42     0.18     1.26
 Spot platinum     868.49    13.99     1.64
 Spot palladium    544.72     8.75     1.63
 Comex gold        1096.5     15.6     1.44
 Comex silver       14.41    0.206     1.45
                                           
 COMEX gold and silver contracts show the
 most active months
 
    

 (Additional reporting by Josephine Mason in Beijing; Editing by
Subhranshu Sahu)

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