Tuesday, Oct 27th 2020 6:17 PM
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Market Digest Nigeria

Economy

Gold hits 6-year high over fear of US-Iran War

The price of gold rose to US$1,588 an ounce on Monday, a six-year high, and was expected to trend higher, as investors sought safety amid the heightening conflict between Iran and the United States.

Tipa Nawawattanasub, chief executive of YLG Bullion and Futures Co, said the tension between Iran and the US caused the local gold selling price to soar by 350 baht per baht weight to 22,500 baht for bullion and 23,000 baht for gold ornaments.

“This week the price could rise to $1,600 per ounce if retaliation between the two countries persists. It could  continue until the US presidential election in November 2020,” she said.

Investors were buying gold as a safe asset, and gold sales naturally rise ahead of the Lunar New Year, Ms Tipa said.

“The gold price rose rapidly from $1,550 per ounce on Friday to $1,588 per ounce this morning. It may reach $1,600 per ounce this week. Analysts have changed their target price to $1,740 per ounce this year on the possibility that tension between Iran and the US grows,” she said.

She advised buying gold when its price drops to $1,560-1,566 an ounce, but also warned the price could fall sharply on profit-taking if the Iran-US situation eases. Jitti Tangsitthpakdi, president of the Gold Traders Association, set resistance at $1,600 an ounce and said investors were fearful of World War III.

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