Gold hit a 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 one percent at $1,525.99 an ounce as of 11:23 GMT, off a day high of $1,534.31 – its highest level since April 2013.
US gold futures were up 1.3 percent to $1,537 an ounce.
Investors are fleeing from riskier assets such as bonds and stocks and buying gold, which is viewed as a safe haven in times of political and economic uncertainty.
“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.”
Stock 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 Argentina peso.
In Hong Kong, pro-democracy protesters on Monday and Tuesday managed to shut down the city’s airport, the world’s busiest air cargo hub.
Elsewhere, Argentina’s peso plummeted on Monday, losing roughly 15 percent of its value against the dollar after crumbling to an all-time low.
Fears of a possible return to interventionist policies of the previous government have gripped the Argentine market since President Mauricio Macri – a champion of free markets – lost a primary election by a bigger-than-expected margin.
In addition to gold, the Japanese yen and US Treasuries are also seen as relatively safe investments when uncertainty grips markets.
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 percent chance that the US central bank will cut interest rates by a quarter of a percentage point when policymakers meet in September.
Gold is not the only precious metal getting a boost from uncertainty. Silver climbed two percent to $17.40 an ounce, having touched its highest since January 2018. Platinum rose 1.4 percent to $864.77, while palladium gained 0.5 percent to $1,434.68 an ounce.