Gold inches up as Italy crisis drives safe-haven buying
BENGALURU — Gold prices edged up on Wednesday as political turmoil in Italy and concerns over Sino-US trade conflict spurred safe-haven demand, though a strong dollar limited gains for the metal.
Spot gold was 0.10% higher at $1,298.86 per ounce by 0349 GMT.
US gold futures for June delivery were nearly unchanged at $1,298.80 per ounce.
Rising political uncertainty in Italy and growing US-China trade tensions should see gold holding a bid, said Stephen Innes, APAC trading head at OANDA. “But with the yellow metal’s sensitivity to the US dollar on full display, it is unlikely gold will move significantly higher until we reach the EU ‘Crisis Zone’ which we are nowhere near at this stage.”
The dollar index, which measures the greenback against a basket of six major currencies, hovered near its six- and- a- half month peak touched in the previous session.
Further supporting gold was a slide in Asian stocks, which extended a global sell- off on Wednesday as Italy’s political crisis rippled across financial markets.
Investors fear that repeat elections in the euro zone’s thirdlargest economy — which could come as soon as July —may become a de-facto referendum on Italian membership of the currency bloc and the country’s role in the European Union.
Meanwhile, the US said on Tuesday that it still holds the threat of imposing tariffs on $ 50 billion of imports from China and will use it unless Beijing addresses the issue of theft of American intellectual property.
Gold is often seen as a safe investment during times of political and financial uncertainty.
Holdings of SPDR Gold Trust, the world’s largest gold- backed exchange- traded fund, rose 0.35% to 851.45 tons on Tuesday.
In other precious metals, spot silver was down 0.10% at $16.34 an ounce.
Platinum fell 0.30% to $901.20 an ounce and palladium was 0.50% lower at $974.05. —