Gold futures headed solidly higher on Monday after an attack on Saudi Arabian oil production sent oil prices skyrocketing and investors turning to haven assets, including bonds and precious metals.
on Comex gained $9.70, or 0.7%, to $1,509.20 an ounce, after registering on Friday a weekly decline of 1.1%. Silver for December delivery
added 32 cents, or 1.8%, to trade at $17.885 an ounce, following a weekly loss of 3%, according to FactSet data.
The gain for oil comes after Saudi oil production facilities on Saturday were hit by a drone attack according to Saudi Arabian officials, which knocked out 5.7 million barrels of daily production, representing some 5% of global production. The event, described by commodity experts as the largest-ever single disruption to crude output, has rattled markets because spikes in oil prices can hobble global economies. The kingdom has been racing to restore roughly one-third of the disrupted production.
“Gold suffered a pullback last week but remains an attractive alternative given the uncertain geopolitical backdrop and the likelihood that sovereign debt expansion will be more widely implemented in conjunction with aggressive monetary policy,” wrote Bruce Bittles, chief investment strategist at Baird.
Trade in bullion also comes as investors are awaiting the Federal Reserve’s Wednesday policy decision, where a rate cut is expected, which could influence gold and other metals.