Gold hits 6-year high

Gold hit a six-year high on Tuesday (June 25) in its fourth consecutive day of gains, but analysts warned a correction could be due.

The yellow metal climbed 1.71% to US$1,429.55/oz in morning trade in London, its highest since May 2013.

Prices have risen sharply following comments by Federal Reserve chair Jerome Hayden Powell that the case for US interest rate cuts has strengthened, due to increased global economic and trade headwinds.

Gold's gains have also come amid growing tensions between the US and Iran, after the latter shot down a US drone over its territory, with the US imposing fresh sanctions targeting Iran's leader, Ayatollah Ali Khamenei, and his affiliates.

But gold could be in for a fall, according to Kitco's Jim Wyckoff.

"However, the recent strong gains have now put gold into a short-term overbought condition, technically, which means the market is due for a normal and healthy downside correction very soon."

Market participants may also be getting ahead of themselves in guessing how soon the Federal Reserve will cut rates, with members divided on the issue, Haraeus said in a note.

"If the Fed fails to deliver a rate cut next month there could be a swift reversal to a stronger dollar, which would be a drag on the gold price," it added.

Silver closed 0.2% up at US$15.40/oz, a three-month high.