Precious metals soar as investors flee from equities

European shares in the red after a slide in Asian markets

Gold jumped 1 per cent to a more than three-month peak yesterday as investors took cover from a slide in global stocks and rising political and economic uncertainty.

Palladium also soared to a record high on the back of increasing tensions between the United States and top producer Russia, with additional support from expected demand from the Chinese automotive sector.

Spot gold was up 1.1 per cent at $1,235.03 (Dh4,535.65) an ounce at 1132 GMT, having touched its highest since July 17 at $1,236.58. US gold futures rose 1.1 per cent to $1,238.20 as momentum proved strong enough to counter the rising dollar, which touched a twomonth high.

“Rising risk aversion, falling stock markets and continued concerns regarding Italy are supporting prices,” said Commerzbank analyst Carsten Fritsch.

“Now we have risen above the 100-day moving average (around $1,224), which is key, so maybe we can see it rise to $1,250, which could be the next target.”

European shares were in the red after a slide in Asian markets, weighed down by negative sentiment over trade wars, Italy’s finances and unfolding events in connection with the death of journalist Jamal Khashoggi in the Saudi Arabian consulate in Istanbul.

The European Commission reportedly rejected Italy’s proposed 2019 budget and asked for a new plan, a first in European Union history, a European source said yesterday.