Gold Soars on Investors Flight to Safe-Haven Assets as ECB Meeting Begins

Gold prices climbed to their highest level in more than a month on Tuesday, as investors flee to safe-haven assets ahead of today’s key ECB meeting and other market-moving events this week.

ECB Meeting

Tension in the Middle East, a testimony from former FBI Director James Comey and an election in Britain drove investors away from risky assets.

Gold futures hit a high of $1,296.40 per troy ounce before settling at $1,293.83 per troy ounce, up 0.9%. Spot gold, meanwhile, was trading at $1,291.18.

The latest opinion poll in Britain shows Prime Minister Theresa May ahead of the Labour Party by just one percentage point ahead of the election on Thursday.

Other polls show conservatives up 11 or 12 points.

If May doesn’t win the election by a large majority, it would weaken her position just as formal Brexit talks begin.

ECB Meeting in Focus

 

The European Central Bank is slated to hold its policy meeting later that day.

Investors will also be paying close attention to former U.S. FBI Director James Comey’s testimony before the Senate Intelligence Committee. The hearing, held on Thursday, may add to the difficulties Trump is facing.

Meanwhile, tensions in the Middle East have sent oil tumbling to less than $50 per barrel. European and other global markets also slipped on increased tension and other market-moving events.

Investors turned to gold and German government bonds, nudging gold prices to a six-week high and 10-year borrowing costs in Germany to a six-week low.

In other metals news, silver futures added 4.7 cents, or 0.3%, to trade at $17.62 per troy ounce. Copper futures were trading at $2.525 per pound, down 3.3 cents.

Palladium gained 0.3% to trade at $844.30 an ounce. Platinum was up to $962.90 an ounce, up 0.5%.

The dollar index fell to a seven-month low. Gold typically moves in the opposite direction of the dollar, as investors prefer safe-haven assets in times of uncertainty.