Gold rallies 1% after explosions in Brussels

Gold rallied more than 1 per cent on Tuesday after two explosions at Brussels airport killed at least 13 people and a further blast hit the Belgian capital's Metro, with investors seeking assets seen as a haven from risk.

Belgium's federal prosecutor said the airport explosions resulted from a suicide attack, public broadcasters VTM and RTBF reported.

The Belga agency said shots were fired and there were shouts in Arabic shortly before two blasts rang out.

Spot gold rallied to a high of $1,259.60 an ounce in the wake of the news, and was at $1,249.86 at 1030 GMT, up 0.5 per cent.

US gold futures for April delivery were up $6.40 an ounce at $1,250.60.

Gold fell for three days to Monday on uncertainty over the path of US interest rates. Speculation rates would rise pushed the prices down 10 per cent last year, but they have rebounded 20 per cent since January 1 as those expectations 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 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).”

Atlanta Federal Reserve President Dennis Lockhart had said on Monday the United States may be in line for a rate hike as soon as next month, another sign that policymakers are comfortable letting US monetary policy diverge from other major economies.

European stocks fell and investors rushed for the safety of government bonds after the explosions in Brussels.

The euro fell, the yen and the Swiss franc rose, and the dollar index climbed 0.3 per cent after the news.

Swiss gold exports fell to an 18-month low in February as shipments to leading gold consumers India,

China and Hong Kong slid from the previous month. "Exports to China, Hong Kong and India plunged by over 40 per cent month-on-month and are thus nearly 30 per cent lower than in the same period last year. This points to subdued gold demand in Asia,” Commerzbank said in a note.

Silver was up 0.7 per cent at $15.89 an ounce, platinum rose 0.1 percent to $980.70 an ounce and palladium gained 0.3 per cent at $598.70 an ounce