Bengaluru: Global gold prices held steady on Tuesday near last session’s 2-1/2-month high as risk-averse investors sought refuge in the metal amid rising political tensions and economic uncertainty. Spot gold was little-changed at $1,226.11 an ounce at 0353 GMT. Gold prices 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. Asian stocks rose modestly on Tuesday, gaining a firmer footing after a week of heavy losses. U.S. gold futures were flat at $1,229.90 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 U.S. mid-term 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 medium- to longer-term outlook remains dictated by the dollar and U.S. rate hike expectations."
The stock market is not stabilised yet and gold prices are expected to go up, said Yuichi Ikemizu, Tokyo branch manager, ICBC Standard Bank.
“If it (gold) breaks the $1,230 level, which has been a resistance for a long time, with short positions being still quite large, there is a good possibility of buyback of short positions which could push prices to $1,250."
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, usually seen as a safe store of value during political and economic uncertainty, remains down nearly 10 percent from its April peak after investors preferred the dollar as the U.S.-China trade war unfolded against a background of higher U.S. interest rates.
“The soft U.S. inflation figures in September have prompted investors to reevaluate the Federal Reserve’s hiking path beyond December. With Donald Trump’s recent criticism of the Fed adding to the factors that have weakened the dollar, gold is likely to edge higher in the near term," Otunuga said.
U.S. retail sales barely rose in September as a rebound in motor vehicle purchases was offset by the biggest drop in spending at restaurants and bars in nearly two years.
Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.55 percent to 748.76 tonnes on Monday.
In other metals, platinum was flat at $838.49 per ounce after touching its highest level since July 10 at $850.10 on Monday. Palladium was little-changed at $1,083.25 and silver gained about 0.2 percent at $14.67.
This story has been published from a wire agency feed without modifications to the text.