Gold rises 1% to $1,419 an ounce




 Gold rose 1 percent on Tuesday, to its highest price in more than three months, as investors sought safe havens from rising geopolitical tension, with an attack by Western powers on Syria seen possible within days.
“The possibility of US military action against Syria is driving demand for safe-haven assets including gold,” said Jeffrey Sherman, commodities portfolio manager at DoubleLine, an asset manager with about $57 billion in assets under management.
Bullion prices rose along with other safe havens such as US Treasuries, while U.S. equities, measured by the S&P 500 index, dropped 1.2 percent.
US home prices rose in June but the pace of gains cooled, suggesting higher mortgage rates may end up slowing momentum as the year winds down.
Spot gold climbed 1 percent to $1,419.09 by 1:02 p.m. EDT (1702 GMT), having earlier hit $1,423.41, which marked the highest since May 15.
US gold futures GCZ3 for December delivery climbed $25.90 to $1,418.90 an ounce. Trading volume was at 140,000 lots, about 30 percent below its 30-day average, preliminary Reuters data showed.
Investor sentiment also received a boost after data from the International Monetary Fund showed Turkey, Russia and Azerbaijan increased their gold reserves in July as bullion prices recovered from near three-year lows.
Buying related to Comex September options expiration on Tuesday could further lift prices, with strong open interest positioned at the call strike of $1,425 which is slightly out of the money, traders said.
Gold’s convincing break above $1,400 continues to improve its technical outlook, analysts said.
“Gold is now decisively through previous resistance (55-day moving average and downward channel top) and is pushing higher toward the $1,500-$1,532 area, where the 200-day moving average and lows from late 2011 and 2012 converge,” CitiFX said in a note.
Gold’s 12-percent rally in the last two weeks has sent its 14-day relative strength index (RSI) to 71, an area often considered as overbought.
Among other precious metals, spot silver XAG= was up 1.3 percent to $24.59 an ounce, having earlier hit $24.68, which marked the highest since April 15.
Platinum eased 0.6 percent to $1,531 an ounce, after reaching its highest since April 9 at $1,552.50 in earlier trade, buoyed by supply disruptions in South Africa.
Palladium edged up 0.3 percent at $746.47 an ounce.


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