Picture: 123RF/REALROCKING
Picture: 123RF/REALROCKING

Gold prices hit a six-month high on Wednesday as concerns over global growth and a partial government shutdown in the United States fuelled risk aversion, prompting investors to seek refuge in the metal.

Spot gold climbed 0.3% to $1,271.85 per ounce. The metal hit $1272.56 in early trade, its highest since June 20.

US gold futures were up 0.3% at $1,275.8 per ounce.

Investors are uneasy about global economical growth and are seeking gold as a safe-haven, said Yuichi Ikemizu, Tokyo branch manager at ICBC Standard Bank, adding the sharp sell-off in stock markets has also lent support.

"We always see good demand for gold in the year-end. I would not be surprised if we see gold surpass $1,300 in the near future."

Asian equities were shaky following a Christmas eve US stocks plunge. Wall Street has dropped sharply in recent weeks on concerns over weaker economic growth, compounded by political instability in the United States after a partial government shutdown.

The US Senate has been unable to break an impasse over Trump's demand for more funds for a wall on the border with Mexico, and a senior official said the shutdown could continue until Jan. 3.

Tensions between the White House and the US Federal Reserve over monetary policy tightening also weighed on sentiment in the wider markets.

President Donald Trump largely laid the blame for economic headwinds on the Fed, openly criticizing its chairman, Jerome Powell, whom he appointed.

"The latest move on gold should be a stark reminder to investors that gold in any form should be an essential part of any long-term investment strategy as again they yellow metal has proven its weight when markets turn turbulent," Stephen Innes, APAC trading head at OANDA in Singapore, said in a note.

Among other metals, silver rose 0.5% to $14.80 per ounce, while platinum rose 0.3% to $784.50.

Palladium was up 0.5% to $1,252.24 per ounce.

Reuters