Bengaluru — Gold hit a more than six-year high on Tuesday as unrest in Hong Kong and a rout in the Argentine peso drove investors already spooked by the US-China trade war into havens such as bullion at the expense of riskier assets such as stocks.

Spot gold was up 1% at $1,525.99 an ounce as of 11.23am GMT, off a day high of $1,534.31 — its highest level since April 2013. US gold futures were up 1.3% to $1,537 an ounce.

“Bond yields and equities are down, which are the main reason for gold being higher. There is a bit of safe-haven [interest],” ABN Amro analyst Georgette Boele said. “People are nervous about Hong Kong again, and that’s why Asian markets were down.”

Share markets slid for a third day on Tuesday as investors were spooked by fears of a drawn-out global trade war, the Hong Kong protests, and a crash in the peso.

In Hong Kong on Monday, pro-democracy protesters managed to shut down the city’s airport, the world’s busiest air cargo hub.

Argentina’s peso collapsed on Monday, losing roughly 15% of its value against dollar after crumbling to an all-time low. Fears of a possible return to interventionist policies of the previous government have gripped the Argentinian market since market-friendly President Mauricio Macri lost a primary election by a bigger-than-expected margin.

Bullion, along with the yen and US treasuries, is seen as a relatively safe investment in times of political and financial uncertainty. The yen rose to a seven-month high against the dollar in the previous session, while US 30-year bond yields extended Monday’s losses to slip to their lowest since July 2016.

Analysts said negative debt yields around the globe were further supporting bullion. Non-interest-bearing gold tends to benefit when yields on other assets are low.

Market focus is now on the US Federal Reserve’s annual symposium next week for clues on the future trajectory of interest rates. Traders see a 69% chance of a 25-basis-point rate cut by the US central bank in September.

On the technical front, “a solid breakout and daily close above the $1,525 level is likely to inject gold bulls with enough inspiration to challenge $1,550”, FXTM analyst Lukman Otunuga said in a note.

Holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, jumped 0.9% to 847.77 tonnes on Monday.

Among other precious metals, silver climbed 2% to $17.40 an ounce, having touched its highest since January 2018. Platinum rose 1.4% to $864.77, while palladium gained 0.5% to $1,434.68 an ounce.


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