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Gold futures on Wednesday were off their highs but were hanging around their loftiest levels since 2013 after briefly bursting through at $1,600, following an Iranian retaliatory strike against U.S. miliary bases in Iraq late Tuesday.
Iran fired more than a dozen missiles at bases in Iraq where U.S. troops are stationed. Iran’s Islamic Revolutionary Guard Corps said the attacks were in response to the killing last week of Maj. Gen. Qassem Soleimani.
The missile strikes rattled markets overnight, but surging prices for safe haven assets, like gold, have moderated somewhat after Iran’s foreign minister said the country had taken “proportionate measures in self-defense” and didn’t seek escalation or war. On Twitter, President Trump said “All is well!.”
President Donald Trump is expected to discuss the attack and the U.S.’s response to it later Wednesday, but messages so far have suggested that the parties are attempting to avoid all-out war in the Middle East region.
“Escalating tensions in the Middle East have hit global risk appetite, boosting buying sentiment towards safe-haven assets. Gold bulls remain in the driving seat with further upside expected as uncertainty supports the flight to safety,” wrote analysts at Oanda, Lukman Otunuga and Han Tan, in a daily research note.
On Wednesday, February gold GCG20, +0.18% on Comex was down $4.40, or 0.3%, at $1,570 an ounce, after hitting an intraday high at $1,613.30, according to FactSet data. Prices for the most-active contract at that level were around their highest levels since 2013.
“Gold exploded higher on Wednesday, punching above $1600 for the first time in almost seven years as geopolitical shocks sent investors flocking to safer segments of the market,” the Oanda analyst’s wrote.
However, an upbeat report from Automatic Data Processing Inc. indicated that the U.S. added a better-than-expected 202,000 jobs in December, compared with an estimate of 157,000 by Econoday. The report comes ahead of a more closely watched jobs report on Friday, which will be gauged to glean the health of the U.S. economy.
Bullion is trying for its 11th straight positive finish.
March silver SIH20, -0.15% was down 14 cents, or 0.8%, at $18.255 an ounce.
