(Reuters) - Gold soared more than 2% on Wednesday to breach the $1,500 ceiling for the first time in over six years as investors rushed to safe havens, spooked by a host of uncertainties including U.S.-China trade and a slowing global economy.
Other precious metals, except palladium, latched on to gold’s rally, with silver breaking above the $17 an ounce mark for the first time in more than a year.
“There are just numerous fundamental reasons behind gold’s strength and those are adding to today’s extension to the upside over $1,500. Clearly, safe haven products have been the stars of the show,” said David Meger, director of metals trading at High Ridge Futures.
Spot gold gained 2.4% at $1,508.81 per ounce at 12:33 p.m. EDT (1633) GMT, having touched $1,510, its highest since April 2013.
U.S. gold futures climbed 2.5% to $1,520.70.
Easing monetary policy by central banks, which have also been constantly piling on to their bullion reserves, weak economic readings globally and in addition, the ongoing trade tensions, are fuelling gold’s run, Meger added.
The world’s two largest economies have been locked in a bitter trade tussle, which escalated last week when U.S. President Donald Trump said he would impose additional tariffs on Chinese goods.
On Monday, China responded by allowing its currency to weaken past the 7 per dollar mark, prompting Washington to label Beijing a currency manipulator.
Also fuelling gold’s rally was a slump in U.S. Treasury yields and Wall Street, with the Dow Jones Industrial Average tanking more than 300 points.
“With volatility significantly higher and risk of correction in equities markets growing after pretty nasty several days of sell-offs, gold looks like it is attracting investors at a very rapid rate,” said Bart Melek, head of commodity strategies at TD Securities in Toronto.
Spot gold has sprinted over 19% since touching this year’s low of $1,265.85 in May.
Meanwhile, U.S. short-term interest rates futures rose on Wednesday, as traders increased bets that the Federal Reserve would cut key borrowing costs three more times by year-end.
‘Gold fever’ could be sustained by factors including “the current stage of the economic cycle, the scarcity of safe-haven assets and central bank purchases,” analysts at Societe Generale said in a note.
Gold denominated in the British pound, Japanese yen, Australian dollar and Indian rupee hit their highest on record.
Silver surged over 4% to $17.12 per ounce, its highest since June 2018. Platinum jumped 2.5% to $868.79 an ounce, while palladium dipped 1.2% to $1,419.43.
Reporting by Eileen Soreng, K. Sathya Narayanan and Swati Verma in Bengaluru; Editing by Nick Zieminski and Alistair Bell