Dow futures also fell sharply ahead of the opening bell in New York, mirroring a subdued market for stocks.
Gold Rises; Silver Follows
Precious metals advanced sharply on Monday even as the U.S. dollar strengthened against a basket of its major peers. Dollar-denominated gold and silver often move inversely with the greenback because the currency’s value influences foreign demand for precious metals.
Gold for December delivery, the most actively traded futures contract, reached a high of $1,419.70 a troy ounce on the Comex division of the New York Mercantile Exchange. It was last up $11.50, or 0.8%, at $1,511.00 a troy ounce.
Silver futures climbed 36 cents, or 2%, to $17.93 a troy ounce.
The gold-silver ratio that is used by investors to determine when to buy and sell precious metals fell 1.3% to 84.20. In other words, 84.20 ounces of silver are needed to buy one ounce of gold.
Earlier this month, gold logged its biggest one-day loss in almost three years as demand shifted from haven to risk-on assets.
Mideast Tensions Take Center Stage
With Saudi Arabia speeding to restore oil output following weekend drone attacks on its production fields, the United States and its allies have implicated Iran in the ordeal.
The drone attacks, which compromised some 5.7 million barrels of Saudi output, were carried out by Yemen’s Houthi rebels. The Iran-backed group has been engaged in a multi-year conflict with Saudi Arabia after Riyadh and its regional allies decided to invade the country in 2015 to restore the government.
The United States and Iran have already exchanged rhetoric amid the latest geopolitical flare-up. President Trump says the U.S. is “locked and loaded,” while Iran countered that it was “ready for a fully-fledged war.”
Geopolitical tensions are often a boon for precious metals and other haven assets, as investors look to counter the emerging threat with a trusted store of value.