Gold is ripping higher

Picture: Brian O’Sullivan

Gold is at a 10-month high, surging back above the $1,300 level today on the back of heightened geopolitical tensions.

Here’s the daily chart, courtesy of Thomson Reuters.

Spot Gold Daily Chart. Source: Thomson Reuters

The spot price currently sits at $1,317.55 an ounce, leaving it at the highest level since November 11, the day after the US presidential election.

At one point during the session it hit a high of $1,322.33 an ounce.

The spot price now risen 9.4% from July 10, extending its rally from December 15 last year to 17.4%.

While news of another missile test from North Korea earlier in the session has contributed to today’s surge, it was already in strong demand thanks to continued broad-based US dollar weakness.

“Gold prices lifted on views that the US Federal Reserve may be cautious in lifting interest rates,” said Vivek Dhar, mining and energy analyst at the Commonwealth Bank in a note released today.

Dhar says that lower long term interest rates will keep gold prices well supported as the “appeal of the precious metal over interest bearing securities improves”, adding that “safe haven demand, driven primarily by rising tensions with North Korea, will also keep gold prices well bid”.

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