Gold is one of the safest havens despite below-par returns in comparison to stocks. However, the demand for the yellow metal hardly loses its sheen. The latest threat of America attacking Syria has made sure that the yellow metal will continue to shine.
Available Options Discussed
On Thursday, the American president, Donald Trump, was engaged in a discussion about the available options with his national security advisors on Syria. He has already threatened missile strikes on the country as a reaction to suspected poison gas attack. For its part, Russia’s diplomat expressed the fears of potential increased conflict between the two countries. However, Trump gave enough indication of a confused timing of his strike when he tweeted that attack on the country could be very soon. Alternatively, he thinks that there could be a delay in the military attack, Reuters reported.
Quantitative Commodity Research consultant, Peter Fertig, disclosed that the American president had retreated a bit from his earlier stand. However, he does not see that the danger is over and believes that the condition could lead to escalating with Russia citing the military attack on Syria. Effectively, he thinks that the present situation looked like going back to a Cold War. That would mean that it could turn into a hot war in case any one of the involved parties loses their patience.
In such a situation, Gold is termed as a haven for investors though it involves a cost to keep it safe. During the times of political and financial uncertainty, investors turn towards the yellow metal only because of its store value. During the financial crisis of 2008 too, the precious metal attracted a lot of interest thus resulting in Gold hitting its lifetime high price per ounce. Since then, it is yet to reach that level.
Around 9.30 GMT, spot gold gained 0.4 percent at $1,240.79 an ounce. As a result, the yellow metal was set for a secondly weekly gain of about half a percent. As far as gold futures were concerned, it was steady at $1,343.70 an ounce.
Global Stocks to Close Positively
It is not only gold, but global stocks to are poised to record their biggest weekly gain in more than a month. Investors have kept away the tensions whereas the American Greenback edged down. As a result, commodities got a big boost. The primary reasons behind it were the easing of tensions between the United States and China over the trade war. Apparently, this also weighed on the yellow metal.
Another key factor was that the American president indicated that negotiations between the two countries were going well. This is also part of the reasons why the biggest gold-backed ETF, SPDR Gold Trust, expanded 0.69 percent to 865.89 tons. Since June 2017, holdings in the ETF increased and the current year saw an expansion of 3.5 percent.