Gold rallies to 5-month high as U.S. airstrikes on Syria drive investors to haven assets
Gold prices surged on Friday, as investors flocked to the perceived haven asset in the wake of U.S. military airstrikes against Syria in retaliation for a suspected chemical attack on civilians earlier in the week.
Gold for June delivery GCM7, +1.05% rose $13, or 1%, to $1,266.30 an ounce. The precious metal ended Thursday’s session up 0.4% at $1,248.50 an ounce as traders kept a close eye on the meeting between U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, which continues Friday.
On a continuous-contract basis, gold is now trading at levels not seen since just before the November election of Donald Trump as U.S. president. If gold were continue to trade at current levels, it could notch the highest close since Nov. 10, when it finished at $1,266.40 an ounce, according to FactSet.
Silver for May delivery SIK7, +0.90% rose 17 cents, or 0.9%, to $18.42 an ounce.
Nearly 60 Tomahawk cruise missiles were launched against a Syrian air base at dawn local time Friday by the U.S. Navy on Trump’s orders. Al Masdar News, which backs the Syrian government, said the attacks caused heavy damage to the Shayrat air base and multiple casualties.
Trump said the U.S. military operation was a response to a “barbaric” chemical weapons attack in Syria that left tens of civilians dead. Speaking at his Mar-a-Lago resort in Florida, Trump said the missile strike was of “vital national security interest” to the U.S.
“This change of strategy against [Syrian President Bashar al-] Assad threatens to destabilize the region with Russia and Iran likely to be unhappy with the move. As the U.S. has bombed Syria this has driven risk appetite lower and pushed traders into safe haven plays such as U.S. Treasurys, gold and the yen,” said Richard Perry, market analyst at Hantec Markets, in a note.
“Gold’s surge in U.S. dollars today also means that it has risen above the technically important 200-day moving average after battling to do so for days, which could lend further buoyancy to the gold price if it were to establish a foothold above this threshold,” wrote Commerzbank analysts.
U.S. stock futures YMM7, -0.16% fell sharply in the immediate aftermath of the strikes, but were just barely lower as the open for Wall Street drew closer. Oil pricesCLM7, +1.27% jumped more than 1%, given supply concerns as Syria is near several major pipelines and supply routes for the commodity.
Gold investors will also keep watch on the outcome of Trump’s meeting with China President Xi Jinping. Potentially combative rhetoric could drive investors toward haven assets such as gold, analysts say.
Also, the closely watched nonfarm payrolls report for March is due for release at 8:30 a.m. Eastern Time from the Labor Department. Gold fell on Wednesday after a strong reading from the ADP’s private-sector employment report, often used by economists to get a sense of the Labor Department’s numbers.
In other metals, copper for May delivery HGK7, -1.02% fell 2 cents, or 0.9%, to $2.633 a pound. Platinum for July delivery PLN7, +0.90% rose $6.40, or 0.7%, to $965.30 an ounce, while palladium for June delivery PAM7, +0.44% rose $3.40, or 0.4%, to $807.50 an ounce.