Gold hit a more than six-year high on Tuesday as unrest in Hong Kong and a rout in the Argentine peso drove investors already spooked by the US-China trade war into havens like bullion at the expense of riskier assets such as stocks. Spot gold was up 1% at $1,526.61 per ounce as of 0916 GMT, having earlier touched its highest since April 2013. US gold futures rose 1.4% to $1,538 an ounce.
"Bond yields and equities are down which are the main reason for gold to be higher. There is a bit of safe-haven (interest)," ABN Amro analyst Georgette Boele said. "People are nervous about Hong Kong again, and that's why Asian markets were down." Share markets slid for a third day on Tuesday as investors were spooked by fears of a drawn-out global trade war, the Hong Kong protests and a crash in the peso.
In Hong Kong, pro-democracy protesters on Monday managed to shut down the city's airport, the world's busiest air cargo hub. Bullion, along with the Japanese yen and US Treasuries, is seen as a relatively safe investment in times of political and financial uncertainty. On the technical front, "a solid breakout and daily close above the $1525 level is likely to inject gold bulls with enough inspiration to challenge $1,550," FXTM analyst Lukman Otunuga said in a note. Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, jumped 0.9% to 847.77 tonnes on Monday.
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