Gold headed up in the early trade on Tuesday, rising to the highest level in three months as the dollar weakened and Iraq`s ongoing tension kept the metal`s safe-haven appeal boosted.
The safety bid has helped bullion price post its second consecutive quarterly gain yesterday, and hit the highest level in three months of $1,332.68 this morning, as traders remained vigilant of the rising tension in Iraq, where escalating violence by Sunni Islamists have threatened to split the one of the world`s top oil-producing nation apart.
On the Iraq crisis, the newly elected Iraqi lawmakers will come under pressure to name a unity government, as Iraqi forces battled to bring down fighters led by the groups formerly known as the Islamic State in Iraq and the Levant (Isil) whose leader was declared caliph of a new Islamic state in lands seized this month across a swath of Iraq and Syria.
The bullion sentiment was also boosted by the lingering tension in Ukraine, where government forces launched new military operations against pro-Russian separatists in the east of the country, just hours after a ceasefire to allow for peace between both sides had expired.
As 04:07 a.m. ET:
- Spot Gold rose 0.50% to $1,324.99 an ounce.
- Spot Silver rose 0.69% to $21.05 an ounce
The dollar-denominated metal also drew support by weakness in the US currency steadied against a six-currency basket, but was still ready to mark its third weekly loss, with the benchmark trading below the 8.0-mark for the first time since mid-May.
Meanwhile, the USDIX was edged slightly higher around 79.82 pulling up from the five-week low of 79.75 hit yesterday.