Gold holds near 4-week high; political tensions support

Rajalakshmi S Updated - January 12, 2018 at 01:56 PM.

Gold held near its highest in four weeks on Monday after rising almost 1 per cent in the previous session as geopolitical tensions boosted its safe-haven appeal.

Spot gold was flat at $1,266.19 per ounce at 0400 GMT. On Friday, it had climbed 0.9 per cent to touch its strongest since May 1 at $1,269.50.

US gold futures slipped 0.2 per cent to $1,265.8.

Political tensions

Political tensions surrounding US President Donald Trump are providing some safe-haven support for gold, OCBC analyst Barnabas Gan said.

The market is also watching out for the Federal Open Market Committee meeting next month for any cues on US Federal Reserve's stance on interest rate hikes and balance sheet reduction intentions, Gan added.

Trump attacked the news media and dismissed leaks from the White House as “fake news” on Sunday, following reports his son-in-law tried to set up a secret channel of communications with Moscow before he took office.

The ongoing furore has raised concerns about his ability to push through promised fiscal stimulus.

Gold, which is used as an alternative investment during times of political and financial uncertainty, has gained more than 4 per cent since hitting an eight-week low of $1,213.81 on May 9.

Spot gold may climb to $1,276 per ounce, as it has broken above a resistance at $1,264, said Reuters technical analyst Wang Tao.

“We remain friendly on gold and suspect that we will likely push higher over the course of the coming week,” INTL FCStone analyst Edward Meir said in a note.

“A weaker dollar, coupled with rising geopolitical tensions should keep the precious metal relatively buoyant.”

Hedge funds and other money managers increased their net long position in COMEX gold for the first time in four weeks, in the week ended May 23, US Commodity Futures Trading Commission (CFTC) data showed on Friday.

Many traders will be away from their desks for public holidays in the United States and Britain on Monday, with US gold futures closing early.

Among other precious metals, silver touched its highest since April 28 at $17.39 earlier in the day and was last down 0.1 per cent at $17.33 per ounce.

Silver's more than 3 per cent weekly gain last week was its biggest since the week ended January 6, 2017.

Platinum , which touched an over one-month high of $965.80 an ounce on Friday, dipped 0.1 per cent to $954.75 per ounce. Palladium, which rose 4 percent last week, was up 0.3 per cent at $792.05 per ounce.

Published on May 29, 2017 06:33