* Silver hits a peak since October 2013 at $23.03/oz
* U.S. orders China to shut Houston consulate
* Platinum scales 5-month peak
* GRAPHIC-2020 asset returns: http://tmsnrt.rs/2jvdmXl
(Adds comments, updates prices)
By Nakul Iyer
July 22 (Reuters) - Gold surged to a nine-year peak on
Wednesday as an escalation in U.S.-China tensions stoked demand
for safety, while silver followed bullion's rally to hit a near
seven-year high on hopes for a recovery in industrial demand.
Spot gold XAU= hit its highest since September 2011 at
$1,870.01, nearing its all-time peak hit the same month.
By 2:03 p.m. EDT (1803 GMT) spot gold jumped 1.3% to
$1,865.61 per ounce, while U.S. gold futures GCv1 closed 1.2%
higher at $1,865.1 per ounce.
"Gold is accelerating higher and that's been mainly on the
geopolitical tensions with China. There seems to be no end in
sight for this escalation ... and it's going to damage sentiment
as the world's largest countries continue to bicker," said
Edward Moya, senior market analyst at broker OANDA.
The United States ordered China to close its consulate in
Houston, while a source said Beijing was considering shutting
the U.S. consulate in Wuhan in retaliation. The tit-for-tat between U.S. and China is likely to further
deteriorate the global economic outlook as it reels under the
impact of the pandemic.
Low interest rates and a wave of stimulus to cushion virus-
hit economies have propelled prices of bullion, widely used as
insurance against rising uncertainties, about 23% higher so far
this year.
Silver XAG= rallied 6.4% to $22.68 per ounce, having hit
its highest since October 2013 at $23.03.
Prices have risen over 17% so far this week, which some
analysts see as the start of a bull run powered by low interest
rates, resurgent investment demand, disrupted production and a
recovery in industrial consumption. "Silver shares some 'safe haven' attributes with gold but is
inherently more leveraged to global growth and manufacturing
recovery," Citi Research wrote in a note.
A rebound in global PMIs, particularly in China, has
accelerated the relative outperformance of silver versus gold
this quarter, Citi added.
Palladium XPD= fell 1.3% to $2,129.25 per ounce and
platinum XPT= rose 2.6% to $904.97 per ounce, having hit its
highest since Feb. 27 at $918.38.
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GRAPHIC-Gold prices in different currencies https://tmsnrt.rs/32PdxSW
GRAPHIC-Silver hits a peak since 2013 https://tmsnrt.rs/3jt3ER1
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