Gold & Silver

Gold inches up on weak dollar, Trump policy worries

Reuters Jan 30 | Updated on January 12, 2018 Published on January 30, 2017

gold

Gold prices crawled higher on Monday on a weaker dollar and as uncertainty over US policy under President Donald Trump stoked safe-haven demand, although the gains were curbed with many in Asia on holiday for the Lunar New Year.

Spot gold had edged up 0.1 per cent to $1,191.98 per ounce by 0735 GMT, while US gold futures were up 0.24 per cent at $1,191.2.

Trump's administration had on Sunday tempered a key element of his move to ban the entry of refugees and people from seven Muslim-majority countries in the face of mounting criticism and protests in major American cities.

Some of Trump's statements and lack of details on policy have led some investors to opt for gold, often seen as an alternative investment in times of geopolitical and financial uncertainty.

“The executive order signed by Trump has raised the uncertainty even higher,” said ANZ analyst Daniel Hynes.

The upturn in safe-haven buying comes at a time when physical demand has been sapped due to the Lunar New Year holiday in Asia, Hynes added.

The dollar index, which measures the greenback against a basket of currencies, was down 0.12 per cent at 100.410.

“USD flows will continue to dictate gold's direction leading into this week's (US Federal Reserve's Federal Open Market Committee) meeting, with broad support sitting towards $1,180, while resistance comes in at $1,200,” MKS PAMP Group trader Sam Laughlin said in a note.

Market for the precious metal has also been buoyed by sluggish US economic data released on Friday.

Economic growth in the country slowed sharply in the fourth quarter as a plunge in shipments of soyabeans weighed on exports, the data showed.

“That puts just enough doubt into the industry's mind about the timing of (US interest) rate hikes,” Hynes said.

Meanwhile, holdings of the largest gold-backed exchange-traded-fund (ETF), New York's SPDR Gold Trust GLD, remained unchanged on Thursday from Wednesday.

Speculators crimped their net long position in gold futures and options, following two straight weeks of increases, data showed. They also raised their silver holdings to the highest since early November.

Spot silver was up 0.23 per cent at $17.16 per ounce. Platinum shed 0.14 per cent to $980.75 per ounce, while palladium dropped 0.5 per cent to $732.4 per ounce. Palladium touched its lowest since January 4 at $708.97 an ounce in the previous session.

Published on January 30, 2017
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