Gold prices moved up sharply and hit a three-and-a-half-month high on Tuesday as equities tumbled amid rising worries about geopolitical tensions, uncertainty about a smooth Brexit and lingering concerns about Italy’s budgetary woes.
Gold futures for December ended up $12.20, or 1%, at $1,236.80 an ounce, the highest settlement since July 16.
On Monday, gold futures ended down $4.10, or 0.3%, at $1,224.60 an ounce.
Silver futures for December settled at $14.793 an ounce, gaining $0.206 for the session.
Copper futures for December ended down $0.0275, at $2.7580 per pound.
The alleged killing of Washington Post journalist Jamal Khashoggi inside the consulate at Istanbul and the resultant diplomatic tensions in Saudi Arabia triggered a sell-off in global stock markets. Treasury yields dropped as well, prompting traders to seek the safe haven investment of the yellow metal.
The Turkish President Recep Tayyip Erdogan today rejected Saudi Arabia’s claim that the journalist was killed accidentally and said that the killing was a planned operation carried out by a Saudi team that entered the consulate on the day of the murder. According to Sky News, the body parts of the slain journalist have been found in the garden of the Saudi Arabian consul general’s home in Istanbul.
Uncertainty about the outlook for global economic growth due to ongoing trade disputes between the U.S. and China, Italy’s huge deficit budget and some disappointing corporate results further dented investor sentiment in capital markets.
After Asian markets tumbled and European stocks followed suit, U.S. stocks were plunging sharply, with the Dow, Nasdaq and the S&P 500 indices losing 2 to 2.2%. Crude oil’s sharp decline too contributed to the weakness on Wall Street.