Gold prices in international markets rose to a six-year high, to reach $1,411 per ounce.- The tension between the US and Iran and the new Federal Reserve policy stance are major reasons for the rise.
President Donald Trump imposed sanctions on Iran’s top leadership after it shot down a US military drone.
The last high that gold saw was in August 2013, when it reached $1,428 per ounce.
US gold futures too rose by 0.8%.
This sharp rise can be attributed to growing tensions between the US and Iran, driving more investors to play safe by purchasing gold.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.37% to 801.96 tonnes on Monday.
Global tensions
The US Fed reserve too failed to cut interest rates as per expectations last week, increasing concerns over global economic slowdown. The Federal Reserve decided to keep interest rates steady at 2.5% after the meeting.
The escalating tensions between the US and Iran too is causing volatility in the commodities markets. After Iran shot down the US drone over an airspace breach, US President Donald Trump on Monday imposed sanctions on Iranian Leader Ayatollah Ali Khamenei and other top officials.
Dollar too dropped to a three-month low against a basket of six major currencies after loss on bets due to disappointment over lack of interest rate easing from US fed. The Euro was stronger against the Dollar, with EUR/USD up 0.3% to 1.13.
Adding fuel to fire is the ongoing trade war between US and China. Investors hope that this tension will be diffused as Trump and Chinese President Xi Jinping meet at G20 summit in Japan, later this month.
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