Gold edges up as geopolitical worries spur safe-haven buying

Rajalakshmi S Updated - January 15, 2018 at 02:44 PM.

gold

Gold edged up on Tuesday as rising political tensions over North Korea and West Asia buoyed safe-haven demand for the metal.

Spot gold was up 0.2 per cent at $1,256.36 per ounce by 0307 GMT, while US gold futures rose 0.3 per cent to $1,257.90.

Heightened tensions in the Korean peninsula and West Asia following US strikes on Syria, along with the upcoming French presidential election, have made investors nervous.

“Gold should retain a measure of support given the political tensions,” said INTL FCStone analyst Edward Meir.

British Prime Minister Theresa May spoke on Monday to US President Donald Trump and agreed that “a window of opportunity" exists to persuade Russia to break ties with Syrian President Bashar al-Assad.

Meanwhile, the Federal Reserve plans to raise US interest rates gradually so as to sustain healthy growth without letting the economy overheat, Fed Chair Janet Yellen had said on Monday.

Rising interest rates lift the opportunity cost of holding non-yielding bullion.

“Rallies above $1,260 could be hard to sustain, as gold lacks momentum from a technical perspective,” said Jeffrey Halley, senior market analyst at OANDA.

“A break of $1,240 will prelude a deeper correction.”

Gold has been failing to break key chart resistance at its 200-day moving average, which sits around $1,256.82 on Tuesday.

Spot gold is still targetting $1,241 per ounce, as suggested by its wave pattern and a Fibonacci retracement analysis, said Reuters technical analyst Wang Tao.

Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, rose 0.21 per cent to 838.26 tonnes on Monday from 836.49 tonnes on Friday.

Spot silver edged up 0.1 per cent to $17.93 an ounce. In the previous session, it marked its lowest in over two weeks at $17.71.

Platinum inched up 0.2 per cent to $937.60 an ounce, after hitting its weakest in over three weeks at $931.85 on Monday. Palladium was down 0.1 per cent at $787.25.

Published on April 11, 2017 04:11