Gold rides on political uncertainty, shrugs off greenback’s appreciation

NEW YORK/LONDON — Gold rose on Monday on geopolitical worries, but was trading in a tight range in the absence of any fresh clues on US monetary policy and as the market looked to economic data later in the week for more direction.

Supporting gold was geopolitical tension sparked by US President Donald J. Trump who on Sunday talked of using trade as a lever to secure Chinese cooperation against North Korea.

Global equity markets eased on Monday as investors assessed how Trump’s protectionist stance on trade will play out during meetings with Chinese President Xi Jinping slated for Thursday and Friday.

Spot gold was 0.30% higher at $ 1,252.66 per ounce by 2: 15 p.m. EDT (1815 GMT), trading in a range between $ 1,244.05 and $1,253.52.

“While the European elections, Brexit negotiations and Trump’s foreign policies could reignite safe-haven interest, gold is not without hurdles,” Standard Chartered said in a note.

“We believe the fragile physical market and Fed rate hikes will create a softer footing for gold prices. We maintain our view that Q2 and Q3-2017 are likely to mark the strongest quarters for gold prices this year.”

Gold is often seen as an alternative investment during times of geopolitical and financial uncertainty.

Bullion largely shrugged off a firmer dollar, which hit a twoweek high against a basket of currencies before easing to trade up 0.20%.

The greenback was up after US construction spending and manufacturing data on Monday were positive overall, affirming the economy’s steady improvement.

“Gold is holding well in spite of being torn between buyers and sellers now as interest rate curve flattening in the US indicates possibly less inflation,” said George Gero, managing director at RBC Wealth Management.

New York Fed President William Dudley, an influential monetary policy maker, did not comment on interest rates in prepared remarks he made on Monday.

Ole Hansen, the head of commodity strategy at Saxo Bank said the focus has now turned to US payrolls data on Friday which could provide more clues on the direction of interest rates.

Spot gold notched a quarterly gain of about 8.40% on Friday, marking its best quarter in a year, mostly driven by uncertainties around Trump’s policies and elections in Europe.

Hedge funds and money managers raised their net long position in COMEX gold for the second straight week in the week to March 28, and boosted it slightly in silver, US Commodity Futures Trading Commission data showed on Friday.

Among other precious metals, spot silver edged down 0.30% to $ 18.17 per ounce but held near one- month highs, platinum rose about 1% to $ 953.65 after recording its best quarter in a year, while palladium was up 0.90% at $ 802.20 an ounce and is up about 17% so far this year. —