Gold prices increased over one percent on Monday as investors look for safe-haven assets following Saturday’s attacks on Saudi Arabian oil facilities.
“Gold, already trading in a technically bullish fashion, was given a further boost over the weekend following drone attacks on Saudi oil processing facilities,” said Ben Kilbey, Battery Metals/Precious EMEA, S&P Global Platts.
The attacks may have driven investors to gold as investors’ lost some appetite for risk. “Safe-havens were well bid Monday morning, including gold and US Treasuries, as participants sought refuge from the geopolitical fallout of the attacks,” added Kilbey.
“The news exacerbated an already shaky global outlook, with world economics under pressure mainly due to the ongoing US-China trade dispute.”
The attacks on the oil facilities interrupted the supply of an estimated 5.7 million barrels of crude oil per day - around five percent of global supply - and two billion cubic feet of gas.
The strikes have been claimed by the Iran-backed Houthi militia in Yemen. However, the scope and precision of the drone attacks show they were launched from a west-northwest direction rather than from Yemen to the south, senior US administration officials said on Sunday.
The Arab Coalition also confirmed on Sunday that its investigations indicated the weapons used in the attack were Iranian.
Oil prices have surged in response to the attack. Saudi Arabian authorities have pledged to use the Kingdom’s oil reserves to compensate for any disruption in supply to its customers.