Gold Rises on Syria Tension

August 28, 2013 at 08:54

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Gold surged for a fifth day to the highest level since May as speculation that the U.S. may lead military strikes against Syria within days spurred investors’ demand for a haven. Silver climbed to a four-month high.

The metal has jumped 19 percent from the closing low on June 27, near the 20 percent increase that’s the common definition of a bull market. Gold for December delivery gained as much as 1 percent to $1,434 an ounce on the Comex, the highest for futures since May 14.

The U.S., France and Britain are moving closer to retaliatory military action against Syria, laying out the justification, putting forces into place and rounding up allies in the region. Syria is suspected of launching an Aug. 21 chemical-weapons attack outside Damascus. Gold is heading for a second monthly climb. It rose to a record in Indian rupees.

“The market is really focused on the safe-haven aspect,” said David Lennox, a resource analyst at Fat Prophets. “There was a bit of risk off the table, with equity markets heading south on the back of escalating words about actions on Syria.”

The Standard & Poor’s 500 Index (SPX) dropped 1.6 percent yesterday, the most since June 20, while the MSCI Asia Pacific Index retreated 1.5 percent today. West Texas Intermediate crude climbed to a two-year high amid speculation that oil supplies may be disrupted. A U.S.-led strike on Syria is likely within the next week, Societe Generale SA said in a report.

Assets in the SPDR Gold Trust reached the highest since Aug. 1, gaining 0.1 percent to 921.03 metric tons, according to the fund’s website. Holdings rose for a second week in the five days to Aug. 23 as prices rebounded from a 34-month low in June.