Gold prices steady

LONDON. — Gold prices were steady yesterday as concerns about political turmoil in Italy and over a trade conflict between China and the United States out weighed strength in the dollar.

Italy kept the dollar at 10-month highs versus the euro amid concerns that repeat elections may become a de-facto referendum on Italian membership of the currency bloc.

The turbulence underpinned gold due to its appeal as a store of value during political and financial uncertainty. The dollar index .DXY , which measures the greenback against a basket of six major currencies, hovered near its 6-1/2month peak from the previous session. A stronger dollar makes assets such as gold more expensive for holders of other currencies, curbing demand.

“There has been a little bit of support from what has been happening in Italy and the potential implications for the Eurozone from the Italian crisis,” Capital Economics commodities economist Simona Gambarini said.

“But it doesn’t seem like the worries are big enough to warrant an increase in prices," she said, adding that price support was slightly eroded by the potential for an interest rate increase in June by the US Federal Reserve.

US benchmark 10-year Treasury yields US/ on Tuesday registered their largest one-day drop since Brexit nearly two years ago. Higher rates could dent demand for non-interest-paying gold.