Gold makes run toward US$1,300 as risk flares from UK to Mideast

[SINGAPORE] Gold's making a run toward US$1,300 an ounce. The metal has rallied to the highest since November as investors position themselves for the outcome of the UK election and potential drama of former FBI Director James Comey's testimony, while also tracking tensions in the Middle East.

Bullion for immediate delivery was steady at US$1,293.71 an ounce at 7:49am in Singapore after rising on Tuesday to US$1,296.15, the highest level since Nov 9, according to Bloomberg generic pricing. The gains have also been supported by a decline in the US dollar, which has dropped to the lowest since October.

Gold has surged 13 per cent in 2017, eking out gains every month in the best run since 2010. The latest leg up has been supported by an increase in haven demand as UK voters head to the polls on Thursday, with the outcome set to dictate how the country handles Brexit.

On the same day, Mr Comey is set to appear before a Congressional panel to testify about his investigation into Donald Trump campaign's ties to Russia.

"Rising political uncertainty continues to provide support for gold,"

Australia & New Zealand Banking Group Ltd said in a note, citing Mr Comey and the UK polls.

"This comes as the diplomatic crisis in the Middle East involving Saudi Arabia and Qatar intensifies. This has seen a continued rise in safe-haven buying of the precious metal. A weaker dollar is also playing its part."

Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed ties with Qatar on Monday citing its support for rival Iran and for extremist groups. The crisis pits US allies against each other, disrupting trade, flights and business activity in one of the world's most strategically important regions.

BLOOMBERG