Investing.com – Gold, the contrarian bet to stocks, continued its approach of $1,250 as a global selloff in equities gave new legs to the precious metal.
A cocktail of geopolitical tensions, led by Saudi Arabia’s crisis over its alleged role in the murder of prominent journalist Jamal Khashoggi, along with a weaker dollar, Italy’s budget woes and the ongoing U.S.-China trade war added to gold’s strength as an inflation hedge and store of value in times of trouble, traders said.
Gold futures on the COMEX division of the New York Mercantile Exchange were up $12.80, or 1%, at $1,234 per troy ounce at 2:50 PM ET (18:50 GMT). It earlier hit a three-month high of $1,242.80, coming within striking distance of the $1,250 level targeted by option holders for December gold.
Just a day ago there seemed little likelihood of gold reaching the $1,250 level before the Oct. 26 expiry of its December options, given the turtle-like progress of the market over the past month.
“We’ve been calling for this day the last couple of weeks,” said George Gero, precious metals analyst at RBC Capital Markets in New York.
He said speculators have amassed one of the largest open interest options in gold in recent times — 1,475,258 contracts — with calls beginning at $1,235 and above and puts at below $1,180.
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