Gold hits five-month high on rising geopolitical tensions
GOLD hit a five-month high on Monday as the dollar weakened with investors taking refuge in safe-haven assets in the wake of rising geopolitical tensions over North Korea.
Spot gold was up 0.5 per cent at US$1,291 per ounce as of 0239 GMT, after hitting its highest since early November at US$1,295.42.
Last week, the metal rose 2.5 per cent in its biggest weekly gain since June last year.
US gold futures were up 0.4 per cent at US$1,293.30 on Monday.
North Korea on Sunday made what was believed to be a failed missile test launch, increasing geopolitical risks. Regional tensions have risen over the past weeks as US President Donald Trump has taken a tough rhetorical line with Pyongyang.
“Gold will likely retain a measure of strength heading into the French elections in about one week’s time, while ongoing tensions in North Korea should also keep the markets rather nervous,” said INTL FCStone analyst Edward Meir.
With the first round of France’s presidential election on April 23, an unpredictable outcome is pushing some pollsters to calculate the most extreme runoff scenarios after Trump’s surprising US presidential win in November and Britain’s unexpected exit from the European Union in July.
The dollar dipped to a fivemonth low against the yen early on Monday.
The bullish sentiment in gold was underscored by data showing speculators increased their net long positions for a fourth straight week to April 11.
New York- listed SPDR Gold Shares ETF, the world’s biggest gold-backed exchange-traded fund, said its holdings rose more than six tonnes on Thursday, the biggest one-day inflow in a month.
Uncertainties over Trump’s policy towards North Korea have been growing since the US Navy fired 59 Tomahawk missiles at a Syrian airfield on April 6.
Adding to these concerns, the US military last week dropped the largest non-nuclear device it has ever used in combat on a network of caves and tunnels used by Islamic State in eastern Afghanistan.
“Gold is trading with an upward bias with the US$1,300 level just in sight... We expect any dips in prices to be eagerly sought by traders,” said Jeffrey Halley, a senior market analyst at OANDA.
Spot gold is expected to rise to US$1,303 per ounce as it has broken above a resistance at US$1,282, according to Reuters technical analyst Wang Tao.
Spot silver was up 0.4 per cent at US$18.59 after touching a fivemonth high of US$18.649.
Platinum rose 0.5 per cent to US$ 975.80, while palladium dropped 0.2 per cent to US$793.40. — Reuters