Gold hit a more than one-week high on Monday as investors hedged against lingering tensions in the Middle East and an impeachment trial in Washington, while deficit-hit palladium’s record run showed no signs of abating.
Spot gold was up 0.3% at $1,560.21 per ounce by 1120 GMT, after touching its highest since Jan. 10 at $1,562.51 earlier in the session. US gold futures were flat at $1,560.30.
“Investors are flocking towards gold in spite of a spike in equity markets mostly because of long-term uncertainties like political insecurity, probable equity market volatility in future, weak-earnings expectations and ultra-low interest rates,” Commerzbank analyst Eugen Weinberg said.
Investors are pouring money into gold exchange traded funds (ETF) and central banks are buying the metal at record rates, Weinberg added. Holdings of the world’s largest gold-backed ETF SPDR Gold Trust rose 2.20% to 898.82 tonnes on Friday, the highest since Nov. 11.
Investors kept a close eye on developments in the Middle East, after Iran-aligned Houthis attacked a military training camp in Yemen on Saturday. Also on the radar was the shutdown of oil facilities in Libya amid a military blockade, and heightened tensions between the US and Iran.
In Washington, President Donald Trump will offer his first comprehensive defense on Monday before his impeachment trial in the Senate. Trading volumes were low with US markets closed for a holiday.
“The rebound of gold despite the strength of the greenback is confirming investors’ strong appetite for bullion,” Carlo Alberto De Casa, Chief analyst at ActivTrades said in a note.
Focus will also turn to the US Federal Reserve as it meets for its first policy meeting of the year later this month, where it is widely expected to keep interest rates unchanged. Spot gold may test resistance at $1,564 per ounce, according to Reuters technical analyst Wang Tao.
Published under arrangements with Reuters.
No content from Business Recorder shall be reproduced, published, broadcast, rewritten for broadcast or publication, or redistributed directly or indirectly in any medium.
Business Recorder shall not be responsible or held liable for any error of fact, opinion or recommendation and also for any loss, financial or otherwise, resulting from business or trade or speculation conducted, or investments made, on the basis of the information posted here. Nor shall Business Recorder be held liable for any actions taken in consequence.’)” onMouseOut=”popop(event,’tip1′)” style=”cursor:pointer”>Copyright Reuters, 2020