LONDON — Gold and silver climbed on the first trading day of 2016 as rising tension between Saudi Arabia and Iran spurred a return to haven assets.
Bullion for immediate delivery gained 1.2 percent to $1,073.77 an ounce by 10:08 a.m. in London, according to Bloomberg generic pricing. The metal sank 10 percent in 2015, a third straight annual drop and the longest losing streak since 2000.
Gold, seen as a haven in times of turmoil, rose after Saudi Arabia cut ties with Iran. That followed an attack on the kingdom’s embassy in Tehran after it executed a prominent Shiite cleric. The gain in the metal followed losses in 2015 as prospects for rising US interest rates boosted the dollar and made assets that offer a yield more attractive.
“Spot gold prices got off to a strong start to the year,” Sucden Financial Ltd. said in a report on Monday. “Tensions between Iran and Saudi Arabia saw demand for the safe haven asset improve.”
Holdings in gold exchange-traded products dropped 2.56 metric tons to 1,463.9 tons on Friday, near the lowest in more than six years, according to data compiled by Bloomberg. The assets shrank 8.3 percent in 2015 in a third year of declines.
Spot silver advanced 1.2 percent to $13.9867 an ounce, palladium retreated 2.1 percent and platinum dropped 1.8 percent.
“When you look across the board, there’s just a little bit of geopolitical risk coming back into the market,” Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney, said. — Agencies
