Gold climbs back near $5,100 as US-Iran tensions lift safe-haven demand

A shop attendant displays a pair of gold bracelets for Chinese weddings at a jewellery store in Hong Kong

Gold prices bounced back to hover near $5,100 on Wednesday, underpinned by safe-haven demand as renewed U.S.-Iran geopolitical tensions added to bullion’s appeal a day after it posted its best day in more than 17 years.

Spot gold was up 2.9% at $5,082.94 per ounce, as of 0813 GMT, after surging nearly 6% on Tuesday, its biggest daily gain since November 2008. Bullion scaled a record high of $5,594.82 last Thursday.

Gold prices bounced back to hover near $5,100 on Wednesday, underpinned by safe-haven demand as renewed U.S.-Iran geopolitical tensions added to bullion’s appeal a day after it posted its best day in more than 17 years.

Spot gold was up 2.9% at $5,082.94 per ounce, as of 0813 GMT, after surging nearly 6% on Tuesday, its biggest daily gain since November 2008. Bullion scaled a record high of $5,594.82 last Thursday.

Goldman Sachs said on Wednesday that it saw significant upside risk to its $5,400 year-end forecast for gold on central banks maintaining their recent pace of accumulation alongside private investors stepping up gold ETF purchases.
“Going ahead … we are expecting the same $5,600 levels (for gold) by the end of the first half or April-end while prices will continue to rise thereafter and our year-end target is $6,000/oz,” said Jigar Trivedi, a senior research analyst at IndusInd Securities.

Spot silver rose 6.1% to $90.34 an ounce. It touched a record high of $121.64 on Thursday but fell to a month-low at $71.33 on Monday having registered a record single-session price wipe-out of 27% on Friday.

Markets now await ADP private payroll data for more cues on the Federal Reserve’s policy path even as a partial U.S. government shutdown has delayed the closely watched employment report for January.