Gold climbs 1.0pc as attacks on Saudi facilities spur demand

BENGALURU, Sept 16 (Reuters): Gold rose more than 1.0 per cent on Monday after an attack on key oil facilities in Saudi Arabia inflamed worries over the stability of the Middle East, driving investors to seek refuge in assets seen as a haven from risk.

A 20 per cent bounce in oil prices in response to the attack also raised concerns over a potential rise in inflationary pressures, against which gold is often perceived as a hedge.

Spot gold was up 1.0 per cent at $1,503.60 per ounce as of 1138 GMT, while US gold futures rose 0.8 per cent to $1,511.80 per ounce.

"The reaction is driven by two factors - one is that people are treating gold as some sort of inflation hedge in this environment," said Julius Baer analyst Carsten Menke.

"The second and the most important factor is the increase in geopolitical tensions, (with) uncertainties related to this event," he added. "People are seeking shelter in the gold market."

Yemen's Iran-aligned Houthi group claimed responsibility for the attack on two plants at the heart of Saudi Arabia's oil industry on Saturday, which knocked out more than half the kingdom's output.

US President Donald Trump on Sunday said the United States was "locked and loaded" for a potential response to the attack after a senior official in his administration said Iran was to blame.

Gold is often used as a safe store of value during times of political and financial uncertainty.