Gold steady as investors shun risk

Escalating trade and geopolitical tensions, concerns over slowing global growth fuel rise

Gold prices held steady yesterday near last session’s two-and-a-half month high as risk-averse investors sought refuge in the metal amid rising political tensions and economic uncertainty.

Spot gold was little changed at $1,226.71 (Dh4,505.71) an ounce at 0707 GMT. It touched $1,233.26 on Monday, its highest since July 26, as global stocks slid on rising tensions between western powers and Saudi Arabia and concerns over the pace of global economic growth.

US election jitters

US gold futures were flat at $1,230.40 an ounce.

“While the sell-off in stocks rekindled some demand, there were other key factors in play. With escalating trade tensions, concerns over slowing global growth, geopolitical tensions and US midterm election jitters in the mix, gold has a chance to shine,” said Lukman Otunuga, research analyst for FXTM. “While the risk-off trading environment is poised to send gold higher in the near term, the mediumto longer-term outlook remains dictated by the dollar and US rate hike expectations.”

Spot gold may fall into a range of $1,208-$1,217 per ounce, as it faces a strong resistance at $1,235, according to Reuters technical analyst Wang Tao.

Gold remains down nearly 10 per cent from its April peak after investors preferred the dollar.