Gold holds its ground

BENGALURU. — Gold held steady yesterday, after hitting a five-week high in the previous session, supported by geopolitical tensions and a weaker dollar, but expectations the US Federal Reserve will hike interest rates this month weighed on prices.

Spot gold was down 0,03 percent at $1 268,46 an ounce at 4.07am GMT. On Wednesday, it touched a session high of $1 273,74 an ounce, its strongest since April 25. US gold futures fell 0,3 percent to $1 268 an ounce.

“We are seeing some safe-haven demand for gold ahead of elections in the UK next week and Friday’s US non-farm payroll data,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

Prime Minister Theresa May could lose control of parliament in Britain’s June 8 election, according to a projection by polling company YouGov, raising the prospect of political turmoil just as formal talks for the country to leave the EU begin. Positive payroll data from the US could mean the Fed will raise rates as expected at its June 13-14 meeting.

Traders believe there is an 87 percent chance of a rate rise, according to CME Group’s FedWatch tool. The higher rates would lower investor demand for non-interest bearing gold. San Francisco Federal Reserve Bank President John Williams said on Wednesday that three rate increases were most likely this year. However, some recent soft US economic data has raised questions whether the Fed will stay with that plan.