Gold soars on the risk-averse demand
With the deterioration of the situation in Syria, it is not a surprise that bullion caught an immediate safe have bid. Gold soared to its five-month high ($1269) after US President Donald Trump launched a missile strike against Bashar al-Assad’s regime in Syria. It has been said on Tuesday, that Syrian government used poison gas against its civilians. The markets didn’t expect such decision from Donald Trump who during his campaign faulted former US leaders for embroiling the country in a number of Middle East conflicts. Investors were distracted by Trump’s meeting with Chinese President Xi Jinping and overlooked the brewing strike at a Syrian government airbase.
Gold acts as a haven during times of geopolitical conflicts or uncertainty. Prices were rising since March amid signs of escalating tension on the Korean peninsula, with North Korea conducting its missile tests. After the US vindication, they rose even higher having broken the sturdy resistance at $1258 (200-day MA). The yellow metal might rise higher on rising tensions between Russia, the ally of Bashar al-Assad, and the US. Earlier today, Russian President Vladimir Putin condemned US air strike and suspended the accord aiming at avoidance of hostile incidents in wrangles between US and Russia.
