Gold steadies on safe haven demand amid geopolitical risk, weaker dollar

GOLD was little-changed on Monday, supported by safe haven interest amid rising geopolitical tensions over North Korea and a weaker dollar.

Investors are closely watching developments after the reclusive state fired four ballistic missiles into the sea off Japan’s northwest coast, days after it promised retaliation over US- South Korean military drills.

“There is still plenty of critical uncertainty supporting safe haven buying and the news out of North Korea certainly has seen that side of the market quite active again,” said ANZ analyst Daniel Hynes.

Spot gold edged down 0.10% to $1,233.18 per ounce at 0611 GMT. The metal hit $1,222.51, the lowest since Feb. 15, in the previous session on signals of a hike in US interest rates this month.

US gold futures rose 0.60%, to $1,233.20.

The dollar slipped in Asian trading on Monday, as investors locked in gains after its rise last week on growing expectations of a US interest rate hike.

The dollar index was down 0.10% to 101.46.

FAIRLY CERTAIN

US Federal Reserve Chair Janet Yellen capped off a seemingly coordinated push from the central bank when she cemented the view that the Fed will raise rates at its next meeting on March 14-15 and likely be able to move faster after that than it has in years.

“We are fairly neutral on the outlook for gold this week. Unless we see any unexpected commentary around that ( interest rates) this week, that is pretty much built into the price now,” Mr. Hynes said.

Spot gold may revisit its March 3 low of $1,222.51 per ounce, as its drop from the Feb. 27 high of $1,263.80 has not completed, according to Reuters technical analyst Wang Tao.

Meanwhile, hedge funds and money managers boosted their net long position in COMEX gold to the highest in over three months in the week to Feb. 28, data showed on Friday.

However, holdings of SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, fell 0.56% to 840.58 tons on Friday.

“If you look purely at a fundamental standpoint, the funds are just playing the markets as they see it,” said Spencer Campbell, general manager with Kaloti Precious Metals in Singapore.

“The recent sentiment going into any discussion around interest rate movements is that they are just selling at the rallies,” he added.

Among other precious metals, spot silver slipped by 0.70% to $17.83 per ounce, while platinum inched lower by 0.20%, to $991.60.

Palladium edged up by 0.50% at $775.40 per ounce. The metal hit $ 752.72 — the lowest since Feb. 6 — in the previous session. —