BENGALURU: Gold rose more than 1 per cent on Monday to its highest in about 2-1/2 months as investors sought refuge after a slide in European equities compounded jitters on global stock markets.

Spot gold was up 1pc at $1,230.11 an ounce by 1136 GMT, having touched its highest since July 26 at $1,233.26.

US gold futures rose 1pc to $1,234.

“Gold has now got a stronger tailwind from a flight to safety from risky assets,” said Quantitative Commodity Research analyst Peter Fertig. “Gold’s next moves will depend on how long this sell-off continues.”

Global stocks were under pressure, with European shares falling to a 22-month low, weighed down by factors including the US-China trade dispute, stalled Brexit negotiations, rising tensions between Saudi Arabia and western powers and concern about an economic slowdown in China.

The International Monetary Fund last week said that risks to the global financial system, which have risen over the past six months, could increase sharply if pressures in emerging markets escalate or global trade relations worsen.

“After many months investors are looking at bullion with much more interest and the price is moving consequently,” ActivTrades chief analyst Carlo Alberto De Casa said in a note.

“The outflow in exchange-traded funds (ETF) seen in the last few months is now changing direction as well.” Holdings of SPDR Gold, the largest gold-backed ETF, rose nearly 2pc last week. That was the biggest weekly inflow since January, having registered declines of more than 4 million ounces since hitting a peak in late April.

In other precious metals, platinum climbed 0.9pc to $843.85 per ounce after touching its highest since July 10 at $849.40. Palladium rose 1.62pc to $1,083.30 and silver gained 1.2pc to $14.73.

Published in Dawn, October 16th, 2018