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PRECIOUS-Gold rallies 1 percent after Brussels blasts

Published 23/03/2016, 01:39 am
© Reuters. PRECIOUS-Gold rallies 1 percent after Brussels blasts
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* Explosions hit Brussels airport, Metro, killing 34

* Stocks fall, government bonds rise as buyers seek havens

* GRAPHIC-2016 asset returns: http://reut.rs/1WAiOSC (Updates prices, adds comment)

By Jan Harvey

LONDON, March 22 (Reuters) - Gold rallied more than 1 percent on Tuesday as investors sought assets seen as a haven from risk after deadly bomb attacks hit Brussels airport and a rush-hour Metro train in the Belgian capital.

The attacks killed 34 people, according to public broadcaster VRT, and triggered security alerts across Europe that brought some cross-border traffic to a halt. gold XAU= rallied to a high of $1,259.60 an ounce in the wake of the attacks, and was 0.9 percent higher at $1,254.30 an ounce at 1432 GMT. U.S. gold futures GCv1 for April delivery were up $10.60 an ounce at $1,254.80.

"(The rise in) gold is mainly related to the attacks in Brussels," ABN Amro analyst Georgette Boele said. "Gold is being bought as a safe haven."

European stocks fell and investors also rushed for the safety of government bonds after the explosions in Brussels. The euro slipped, the yen and the Swiss franc rose, and the dollar index climbed 0.2 percent after the news. FRX/ MKTS/GLOB

A witness said he heard shouts in Arabic shortly before two blasts struck a packed airport departure lounge at Brussels airport. The federal prosecutor said one of the blasts was probably triggered by a suicide bomber. buying sparked by the news helped offset comments from Atlanta Federal Reserve President Dennis Lockhart that the United States may be in line for an interest rate rise as soon as next month.

Gold had fallen for three sessions in a row before Tuesday on uncertainty over the path of U.S. rates. Speculation rates would rise pushed gold down 10 percent last year but it has rebounded 20 percent so far in 2016 as those fears faded.

"Before the explosions we had some fairly hawkish comments from one of the Fed officials saying a rate increase could now be on the agenda for April," Societe Generale (PA:SOGN) analyst Robin Bhar said.

"I'd have thought that would have weakened gold, but clearly safe-haven buying on the back of the explosions in Brussels has (pushed prices higher)."

Elsewhere, data from the Swiss customs bureau showed Switzerland's gold exports fell to an 18-month low in February as shipments to leading gold consumers India, China and Hong Kong slumped from the previous month. L5N16U2JK

Silver XAG= was up 0.6 percent at $15.94 an ounce, platinum XPT= was up 1.3 percent at $992.99 an ounce and palladium XPD= was 1.4 percent higher at $605.20 an ounce, just off an earlier four-month high of $606.

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http://reut.rs/1WAiOSC

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