Investing.com – Gold prices hovered around the psychologically important $1,300 level as earlier losses on dollar strength were offset somewhat by rising safe-haven demand following an uptick in geopolitical uncertainty.
for June delivery on the Comex division of the New York Mercantile Exchange fell by $1.90 or 0.15%, to $1,301.80 a troy ounce.
Gold prices recovered from a session low of $1,292.90 to trade roughly unchanged as traders sought safe-haven demand amid rising political uncertainty in Italy and growing U.S.-China trade tensions.
Italy faces the prospect of fresh elections, which could deliver a deeply Eurosceptic government, threatening the future of Eurozone, after proposed prime minister Giuseppe Conte abandoned his mandate to form a government on May 27.
Investors feared fresh election could strengthen the country’s Eurosceptic parties even further, threatening the country’s role in the European Union.
Also stoking safe-haven demand was an uptick in U.S.-China trade tensions after the U.S. administration said that it would move ahead with a proposed 25% tariff on $50 billion of Chinese high-tech goods “containing industrially significant technology.”
The resilience in gold prices comes as the hit a fresh-sixth month high on Tuesday, underpinned by a slump in to a 10-month low.
Gold is sensitive to moves higher in the U.S. dollar – a stronger dollar makes gold more expensive for holders of foreign currency, thus, reduces investor demand for the precious metal.
Rising geopolitical uncertainty, however, has failed to stop money managers from trimming their bets on gold for a second-straight week, according to data from the Commodity Futures Trading Commission on Friday.
showed money managers reduced their net long positions in gold futures to 91,000 lots from 92,400 lots for the week ended May 23.
In other precious metal trade, fell 0.73% to $16.42 a troy ounce, while rose 0.49% to $905.60 an ounce.
fell 0.47% to $3.06.
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