Mounting tensions with Syria sent gold and energy futures sharply higher Tuesday.
Gold reached its highest price since mid-May, and crude oil closed at an 18-month high.
Precious metals came back into favor, as traders loaded up on safe-play assets. Traders tend to shift money into gold and silver when they are fearful of political instability and turmoil in other financial markets. U.S. forces are ready to strike Syria, following that government’s alleged use of chemical weapons in an attack last week.
The December contract for gold rose $27.10, or 2 percent, to $1,420.20 an ounce.
Peter Hug, global trading director with Kitco Metals, said in a note to clients that a looming fight in Washington over raising the U.S. government’s borrowing limit, which will be hit in mid-October, could have “bigger potential to trigger buying” than the Syria showdown.
Silver also rose sharply. The September contract increased 64.1 cents, or 2.7 percent, to $24.651 an ounce. That’s the highest price since mid-April.
Prices for industrial metals were mixed. Copper for September delivery edged up less than a penny to $3.33 a pound, October platinum fell $12.40 to $1,532.10 an ounce, and September palladium rose $3.10 to $749.15 an ounce.