Investing.com - Gold futures rose to the highest level since May on Wednesday, as safe-haven buying continued amid growing speculation the U.S. was moving closer to taking military action against Syria’s government.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,423.40 a troy ounce during European morning hours, up 0.25%.
The December contract settled 1.95% higher at USD1,420.20 a troy ounce on Tuesday.
Futures rose by as much as 0.9% earlier in the session to hit a daily high of USD1,433.50 a troy ounce, the strongest level since May 14.
Gold futures were likely to find support at USD1,368.40 a troy ounce, the low from August 23 and near-term resistance at USD1,444.15, the high from May 14.
Expectations for a military strike against Syria grew after U.S. Defense Secretary Chuck Hagel said Tuesday that U.S. forces are "ready" to launch strikes if President Barack Obama chooses to order an attack.
On Monday, U.S. Secretary of State John Kerry said there was “undeniable” proof that the Syrian government had used chemical weapons against civilians.
Investors often buy gold as a refuge against political uncertainty.
Meanwhile, uncertainty over the timing of a reduction in the Federal Reserve’s bond-buying program continued after data showed that U.S. consumer confidence rose more than expected in August, hitting the highest level since January 2008.
The Conference Board said Tuesday its index of consumer confidence rose to 81.5 in August from an upwardly revised 81.0 in July. Analysts had expected the index to tick down to 79.0.
The data came after a report on Monday showed that U.S. durable goods orders dropped 7.3% in July, worse than expectations for a 4% decline. It was the largest decline since August 2012.
Gold traders have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.
The central bank is scheduled to meet September 17-18 to review the economy and assess policy.
The precious metal has rebounded nearly 18% since hitting a 34-month low of USD1,180.15 a troy ounce on June 28.
Despite recent gains, the precious metal is still on track to post a loss of approximately 15% on the year amid concerns the Fed will start to unwind its stimulus program by the year's end.
An exit from the stimulus would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies.
Elsewhere on the Comex, silver for December delivery rose 0.55% to trade at USD24.83 a troy ounce, the strongest level since April 15.
Silver prices are up almost 27% since hitting a three-year low of USD18.19 on June 28, placing it firmly in bull-market territory.
Meanwhile, copper for December delivery lost 0.7% to trade at USD3.331 a pound.