Gold at 2-week peak as Trump turmoil hits dollar, US yields

19 May, 2017, 11:08 | Author: Leticia Walters
  • Growth Stutters, But Gold Prices Remain Strong

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Thursday as New York stocks and U.S. Dollar rebounded.

Spot gold was up 0.2 per cent at $US1,230.15 an ounce by 0411 AEST (1811 GMT), on track for a third day of gains after hitting an eight-week low of $US1,213.81 last week.

Gold prices were higher in North American trade on Thursday, touching the strongest level in around two weeks as investors feeling increasingly nervous over the future of Donald Trump's USA presidency sought safe havens for their money. Gold prices could still recover to register a positive trading session by day's end, keeping its current run of success alive.

Pressure on US President Donald Trump deepened after reports that he tried to interfere with a federal investigation.

Despite a small dip in the commodity's value as of this writing, gold has been the beneficiary of the political turmoil that has racked the USA since Donald Trump assumed the presidency. "If we divorce away all the uncertainty, the rate-hike story should at least bring gold prices to $1,100".

"Although there is increasing evidence of a bottom being formed in both gold and silver, we would like to see a bit more "staying power" before choosing to engage more aggressively on the long side", INTL FCStone analyst Edward Meir said.

This has led investors to question whether Trump can push through tax cuts and deregulation and fueled demand for safe-haven assets including gold.

Gold has rebounded following Trump's firing of FBI Director James Comey a week ago, as well as reports he shared intelligence with Russian officials.

It slid to an overnight low of 97.28, levels last seen in the immediate aftermath of Trump's surprise victory in November.

Spot gold may retrace moderately to a support at US$1,252 per ounce, before retesting a resistance at US$1,264, according to Reuters technical analyst Wang Tao.

Gold prices inched up as weaker-than-expected economic data from the U.S. and a missile test by North Korea over the weekend pressured the dollar.

Gold prices pared gains as the USA dollar came off its lows and US 10-year Treasury yields bounced up from a 1-1/2-week low.

United States gold futures were almost flat at US$1,258.40 an ounce.

Among other precious metals, silver rose 0.6% at $16.69 an ounce.

On Thursday, the USA dollar stood near six-month lows against a basket of major currencies, while Asian stocks fell, with MSCI's broadest index of Asia-Pacific shares outside Japan dropping 0.6 per cent.

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