Gold held steady

BENGALURU. — Gold prices held steady yesterday after touching a more than two week high, buoyed by political turmoil in the US and tempered expectations for an aggressive string of US interest rate increases.

Pressure on US President Donald Trump deepened after reports that he tried to interfere with a federal investigation.

This follows a turbulent week after Trump fired Federal Bureau of Investigation (FBI) director James Comey and discussed sensitive national security information with Russia’s foreign minister, causing investors to question whether Trump can push through tax cuts and deregulation.

Gold is used as an alternative investment during times of political and financial uncertainty. Spot gold was flat at $1 260,61 per ounce by 3.45am GMT, after earlier touching its strongest since May 1 at $1 263,02.

It rose about 2 percent on Wednesday in its biggest one-day percentage gain since June last year. US gold futures were up 0,2 percent at $1 260,90 per ounce.

Gold prices had pushed higher amid ongoing safe-haven buying, as geopolitical risks rose, ANZ said in a note. A weaker dollar and falls across equity markets had increased investor appetite substantially. With the spectre of ongoing political uncertainty, gold was likely to remain a sought-after asset, it added.

Spot gold could retrace moderately to a support at $1 252, before retesting a resistance at $1 264, said Reuters technical analyst Wang Tao.

“I think prices have already been pushed up and we might see reversing of gold prices in one or two days. People are likely to go back to basics and see what the interest rates are going to be,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. — Reuters.