Friday 8 August 2014

Gold gets safe-haven boost as US authorises air strikes in Iraq

Gold climbed to 2-1/2-week highs on Friday after U.S. President Barack Obama authorised air strikes in Iraq and the metal looked set to snap a three-week losing streak as global geopolitical tensions spurred safe-haven demand. 

Bullion also got a boost from a drop in Asian share prices on growing fears that conflict in Ukraine and the Middle East could sap global growth. 

Obama said he had authorised limited U.S. air strikes to blunt an onslaught by Islamic militants in northern Iraq and begun military air-drops of humanitarian supplies to besieged religious minorities to prevent a "potential act of genocide". 

The 10-year U.S. Treasury yield hit a 14-month low and the dollar slipped against the safe-haven yen, showing increasing risk-aversion in financial markets. 

Spot gold hit $1,316.80 an ounce, its highest since July 21, and at 0324 GMT was up 0.2 per cent on the day at $1,315.80. 

The metal has gained 1.7 per cent this week, its first increase in four weeks and the best week in seven. U.S. gold 

was up about $5 at $1,317.70. Gold was boosted earlier in the week after U.S. and European equities slumped due to the tension between Russia and the West over Ukraine. 
Moscow banned imports of most food from the West on Thursday in retaliation against sanctions against it over Ukraine, a stronger-than-expected response that isolates Russian consumers from world trade to a degree unseen since Soviet days. 

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