Global qualms burnishing bullion price

Gold hit its highest in nearly four weeks yesterday in response to a weaker dollar and political uncertainty that led investors to shun riskier assets in favour of bullion.

“We have had the political noise coming from Trump and the US administration and there is a certain element of uncertainty in the markets in general, which is supporting gold. Equities are also down,” said analyst Carsten Menke at Julius Baer in Zurich.

Leaders of the world’s rich nations faced difficult talks with Donald Trump at a G7 summit in Sicily yesterday after the US president criticised Nato allies for not spending more on defence and accused Germany of “very bad” trade policies.

Gold is used as an alternative investment during times of political and financial uncertainty.

Spot gold had gained 0.9% to $1,266.01 per ounce by 11am, the highest since May 1. US gold futures gained 0.7% to $1 265.60 an ounce.

Menke expects gold to remain rangebound with a price target of $1 200 in three months.

“We did issue a buy recommendation on gold some two days ago and will stick with that for the time being,” INTL FCStone analyst Edward Meir said. –