The price of gold rose along with other haven assets on Monday, as demand for stocks waned amid fears of another flare-up in the Middle East.
Futures on December gold deliveries reached a session high of $1,501.50 a troy ounce on the Comex division of the New York Mercantile Exchange. The yellow metal now sits just below $1,497 an ounce, having gained 0.5%.
Silver futures also rallied at the start of the week, with the December contract climbing 1% to $17.71 an ounce.
The gold-silver ratio used by investors to determine when to buy and sell precious metals declined 0.5% to 84.35. That’s 84.35 ounces of silver to buy one ounce of gold.
Stocks were under pressure Monday amid reports that an Iranian oil tanker was attacked in the Red Sea , a narrow strip of water separating Africa and the Arabian Gulf.
Tehran says it was hit last week by two missiles off the coast of Saudi Arabia. On Sunday, images of the attack showing two gaping holes in the Iranian oil tanker were released.
Iran and Saudi Arabia are regional adversaries backing opposing sides in Syria, Yemen and Lebanon. The Saudis have been trying to contain Iran’s growing sphere of influence in the region and have accused the Islamic Republic of orchestrating drone attacks on the kingdom’s oil facilities. Yemen’s Houthi rebels, who are allegedly backed by Iran, claimed responsibility for the attacks that knocked out millions of barrels of Saudi production capacity.
Iranian President Hassan Rouhani threatened retaliation but didn’t address any specific perpetrators. He said:
“If a country thinks that it can create instability in the region without getting a response, that would be a sheer mistake.”
The United States announced last week that it will send roughly 1,800 army personnel along with dozens of fighter jets to help protect the Saudis.
Mid-east tensions failed to lift oil prices on Monday amid concerns over energy demand. U.S. West Texas Intermediate (WTI) futures fell 2.7% to $53.22 a barrel on the New York Mercantile Exchange. Brent crude, the international futures benchmark, declined 2.8% to $58.81 a barrel.