Gold price skyrockets to 7-year high

Gold prices hit a seven-year high on Wednesday following an escalation of tensions between the U.S. and Iran.

Spot gold hit $1,591.06 per ounce at 11 am on Wednesday - its highest price since April 2013 - after reaching $1,611.10 in the previous session.

If the U.S.-Iran geopolitical crisis is not resolved, concerns over a potential U.S.-Iran war will persist in the short term, which will raise the gold price further, said Yang Delong, chief economist at the Shenzhen-based First Seafront Fund Management.

Swiss bank UBS set the 2020 gold price target at $1,600, it said in a note, in part due to an interest rate cut in the U.S. stemming from the slowing U.S. economy, which reduced the cost of investing in gold.

The gold price in Shanghai rose moderately on Wednesday. The price of the Au(T+D) contract trading on the Shanghai Gold Exchange gained 2.5 percent to 360.43 yuan per gram ($1,471.05 per ounce) on Wednesday morning.