Investing.com - Gold prices touched fresh six-year highs on Tuesday amid ongoing safe-haven demand in light of escalating tensions between the U.S. and Iran, while Federal Reserve Chairman Jerome Powell prepared to deliver remarks on monetary policy and economic outlook.
Spot gold rose as far as $1,438.99 overnight, its highest since September 2013, before retracing slightly to $1,431.16 by 11:20 AM ET (15:20 GMT), a gain of 0.8% on the day.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange, gained $15.95, or 1.1%, to $1,434.15 a troy ounce.
After U.S. President Donald Trump targeted Iran’s Supreme Leader Ayatollah Ali Khamenei and other top officials with a new round of sanctions, Tehran refused to back down.
Iranian Foreign Ministry spokesman Abbas Mousavi said Tuesday that the “useless sanctions” meant the opportunity for a diplomatic solution has passed.
Still ahead, Powell will be speaking in a New York Times interview at the Council on Foreign Relations in New York at 1:00 PM ET (17:00 GMT) on Tuesday.
Although Powell is unlikely to provide new clues on policy following his press conference less than a week ago, gold has been buoyed by increased expectations for lower interest rates.
Economic data released Tuesday did little to alter the argument that the Fed needed to support the economy as consumer confidence hit a 21-month low while new home sales unexpectedly fell for a second-consecutive month.
Trump recently renewed his attacks on the Fed for last weeks’ decision to hold on rates. “We need rates cuts and easing to make up for what other countries are doing against us,” he tweeted on Monday.
Chris Turner, ING head of FX strategy, said in a note that, “with the president breathing down his neck, we doubt Powell is in a position to reject aggressive pricing of Fed easing.”
As a short-term risk, Helen Rush, senior analyst at Capital Markets, pointed to this week’s G20 summit.
“The U.S. and China leaders are expected to meet on the sidelines of the summit and any positive news from this front may fuel risk-on sentiment and thus decrease the appeal of the bullion,” Rush said.
In other metals trading, silver futures rose 0.5% at $15.447 a troy ounce by 11:21 AM ET (15:21 GMT).
Palladium futures traded up 0.7% at $1,538.60 an ounce, while sister metal platinum advanced 0.3% at $818.80.
In base metals, copper gained 1.5% to $2.746 a pound.