BackGlobal gold prices rise on weaker dollar and Trump’s immigration ban policy
Spot gold prices had risen 0.22% to $1,193.88 per ounce by 8.27am, while US gold futures were up 0.45% at $1,193.70
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Bengaluru: Gold prices edged up on Monday, supported by a weaker dollar and as uncertainty over the outlook for US policy under President Donald Trump stoked safe-haven demand.
Spot gold had risen 0.22% to $1,193.88 per ounce by 8.27am, while US gold futures were up 0.45% at $1,193.70.
The dollar index, which measures the greenback against a basket of currencies, was down 0.3% at 100.230.
Trump’s administration on Sunday tempered a key element of his move to ban entry of refugees and people from seven Muslim-majority countries in the face of mounting criticism even from some prominent Republicans and protests that drew tens of thousands in major American cities.
“We’ve seen a rise in the amount of safe-haven buying in the past few weeks around the critical uncertainty in the US and Europe, and the executive order signed by Trump has raised the uncertainty even higher," said ANZ analyst Daniel Hynes.
Trump’s protectionist statements and a lack of detail on policy have led some investors to opt for gold, which is often seen as an alternative investment in times of geopolitical and financial uncertainty.
The upturn in safe-haven buying comes at a time when physical demand has been sapped due to the Lunar New Year holiday in Asia, Hynes added. The market for the precious metal has also been supported by sluggish US economic data released on Friday.
Economic growth in the country slowed sharply in the fourth quarter as a plunge in shipments of soybeans weighed on exports, the data showed. “That puts just enough doubt into the industry’s mind about the timing of (US interest) rate hikes," Hynes said.
Gold is highly sensitive to rising US rates, which increase the opportunity cost of holding the non-yielding asset while boosting the dollar, in which it is priced.
Meanwhile, holdings of the largest gold-backed exchange-traded-fund (ETF), New York’s SPDR Gold Trust GLD, remained unchanged on Thursday from Wednesday.
Hedge funds and money managers crimped their net long position in gold futures and options, following two straight weeks of increases. They also raised their silver holdings to the highest level since early November, data showed. Spot silver remained unchanged at $17.12 per ounce at 8am on Monday.
Platinum rose 0.05% to $984.10 per ounce, while palladium dropped 0.18% to $734.65 per ounce. Reuters
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