Gold near 5-week high

BENGALURU. — Gold yesterday hovered near a fiveweek peak hit the session before, buoyed by a weaker US dollar and as the fear that Britain will not have a clean break with the EU stoked safe-haven buying.

Spot gold was up 0,3 percent at $1 184,56 per ounce by 2.49am GMT. On Monday, it touched its highest since December 5 at $1 185,80. US gold futures were steady at $1 184,60 per ounce.

“The comments on the UK around Brexit that impacted the pound saw some safe-haven buying,” said ANZ analyst Daniel Hynes.

The pound slid yesterday after weekend comments from British Prime Minister Theresa May sparked talk that Britain would drastically rework trade relations with the EU after Brexit.

Hynes added that gold was also getting support from strong physical buying in China ahead of the Lunar New Year later in January, although he said the longer-term price outlook would probably be tepid.

“The precious metal has got plenty of headwinds in the medium term. We are not expecting to see any particular upside to the rally we have seen in the past weeks. The outlook for rate hikes in the US will be the biggest driver of gold prices in 2017,” Hynes added.

Gold is highly sensitive to rising US interest rates, which increase the opportunity cost of holding the nonyielding asset while boosting the dollar, in which it is priced.

The dollar index, which measures the greenback against a basket of currencies, was down 0,3 percent at 101.64 yesterday.

Focus is turning towards a news conference on Wednesday when US president-elect Donald Trump may give more details on policies that could be implemented after he takes office on January 20. — Reuters.