Gold climbs to 3-month high as Syrian tensions spur demand

LONDON: Gold on Wednesday climbed to a three- month high, heading for a bull market, as speculation about an attack against Syria within days spurred demand for precious metals as a haven. Silver rose to four-month high.

Gold climbed 1.3 per cent to USD 1,433.83 an ounce, the highest since May 14. A close at USD 1,440.78 would leave the market up 20 per cent from the 34-month low on June 27, meeting the common definition of a bull market.

Silver also climbed 2.6 per cent to USD 25.10 an ounce, the highest since April 15. Any armed response would be focused on Syria's weapons capabilities and wouldn't be aimed at deposing President Bashar al-Assad, US and UK officials said.

UK Prime Minister David Cameron said that while no decision has been made on a course of action, it would be legal and proportionate. Surging demand for jewellery, coins and bars in Asia helped prices rally 19 per cent since the end of June.

Bullion is set for the first annual drop in 13 years after some investors lost faith in the metal as a store of value, spurring at least USD 26 billion of writedowns in the mining industry and losses for John Paulson, the billionaire hedge fund manager.