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Gold near 1-year peak as safe haven demand strengthens

Gold traded close to 1-year highs on Tuesday

Investing.com – Gold prices surged on Tuesday, following a slump in the dollar on the back of rising geopolitical uncertainty and falling expectations that the Federal Reserve will hike rates for a third time later this year.

Gold futures for December delivery on the Comex division of the New York Mercantile Exchange rose $13.04, or 0.98%, to $1,343.42 a troy ounce.

Gold prices jumped to near one-year highs as geopolitical uncertainty remained front and center, fuelling safe-haven demand in the wake of North Korea’s largest and most powerful nuclear test over the weekend.

Also adding to the rally in gold prices were comments from Federal Reserve Governor Lael Brainard urging the U.S. central bank to delay raising interest rates until the trend of slowing inflation improved.

Gold is sensitive to moves lower in both bond yields and the U.S. dollar – A lower dollar makes gold cheaper for holders of foreign currency while a fall in U.S. rates, reduce the opportunity cost of holding non-yielding assets such as bullion.

Gold’s rally to a one-year peak comes amid a surge in buying activity among money manager after net bullish bets on gold rose to 231,000, the highest in eleven-months, according to a report from the Commodity Futures Trading Commission (CFTC) on Friday.

In other precious metal trade, silver futures rose 0.73% to $17.95 an ounce while platinum futures traded flat at $1,007 an ounce.

Copper traded at $3.13, up 0.26% while natural gas futures fell 3.13% to $2.97.

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