Goldnear3-monthhigh
BENGALURU — Gold yesterday held near threemonth highs hit the session before, buoyed as political and economic uncertainty in the United States and Europe stoked safe-haven demand.
Spot gold was largely flat at $1 233,06 per ounce by 0616 GMT. On Tuesday, the metal touched its highest since November 11 at $1 235,78. US gold futures were little changed at $1 236,30 an ounce.
“The biggest momentum behind gold is the fact that the US Federal Reserve did not raise rates in the recent meeting, some uncertainties brought by US President Donald Trump’s policies and a weaker dollar,” said Jiang Shu, chief analyst at Shandong Gold Group.
“Gold prices will continue to rise until mid-February on uncertainties in the US and Europe. But, once January CPI data is released, it will give an idea about the possibility of a rate hike in March,” Shu added.
Controversy over Trump’s temporary travel ban on people from seven Muslim-majority countries has recently boosted appetite for bullion as a safe-haven asset, while political uncertainty in Europe amid upcoming elections has buoyed the dollar.
“Given the absence of significant data this week, the market’s attention may be squarely on politics,” HSBC analysts said in a note.
“It is likely that at least some gold buying is the result of uncertainty over US policy, but also investor reaction to the possibility that the far-right, eurosceptic candidate in the French presidential election this year, Marine Le Pen, is gaining momentum in the polls.”
Investors are concerned that the far right could win France’s presidential vote and take it out of the European Union. Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, climbed 1,01 percent to 826,95 tonnes on Tuesday from Monday. Holdings rose for a fifth straight session.