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Gold & silver rally as investors seek safe havens amid global uncertainty

Gold & silver rally as investors seek safe havens amid global uncertainty
The price of gold surged more than one percent on Monday as investors turned to safe-haven assets, following attacks at the weekend on Saudi Arabia’s oil and gas facilities. The strikes cut off five percent of world oil supply.

The yellow metal jumped 1.2 percent at the open, hitting $1,506 per ounce. Gold is now on track to mark its biggest one-day percentage gain since August 23.

The gold-backed SPDR Gold Trust exchange-traded fund was down 0.82 percent at $140.15, with 874.51 tons in holdings on Friday.

The attacks on the Saudi oil plants have led to a rotation of interests out of stocks and into safe havens, Jeffrey Halley, analyst with Oanda, told Reuters.

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According to him, a risk-averse sentiment in the market underpinned the bullion, often seen as an alternative investment during times of political and financial uncertainty.

With escalating tensions in the Middle East and hopes of more stimulus measures from major central banks, the next target for gold will be $1,530 per ounce, Halley said.

Another safe-haven investment, silver, also gained, rising almost three percent to $17.94 per ounce.

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Saudi Arabia on Saturday shut down half its oil production after a series of drone strikes targeted its two energy plants. The attack was claimed by Yemeni Houthi rebels while the Trump administration blamed Iran.

The closure of the plants is set to affect almost 5.7 million barrels of crude production a day, according to Saudi Aramco. The country’s energy minister said the attacks also led to a halt in gas production, and that it is set to reduce the supply of ethane and natural gas liquids by 50 percent.

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