BackGold prices hit five-month high on rising geopolitical tensions
Spot gold prices were up 0.5% at $1,291 per ounce as of 8.09am, after hitting their highest since early November at $1,295.42
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Bengaluru: 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% at $1,291 per ounce as of 8.09am. The last highest point that the yellow metal hit was in early November at $1,295.42.
Last week, the metal rose 2.5% in its biggest weekly gain since June last year.
US gold futures were up 0.4% at $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 23 April, 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 five-month 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 11 April.
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 6 April.
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 $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 $1,303 per ounce as it has broken above a resistance at $1,282, according to Reuters technical analyst Wang Tao.
Spot silver was up 0.4% at $18.59 after touching a five-month high of $18.649. Platinum rose 0.5% to $975.80, while palladium dropped 0.2% to $793.40.
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