Gold Silver Reports (GSR) – Gold prices rose for a third session on Tuesday as the dollar languished near a five-week low, as investors eyed rising tensions between Russia and the West even as a US-China trade spat appeared to ease.
Spot gold edged up 0.1% to $1,354.51 per ounce at 10.16am, just off Monday’s $1,355.97, the metal’s highest level since 16 February. US gold futures for April delivery were flat at $1,354.60 per ounce.
“Gold prices continue to ratchet higher as the U.S. dollar weakens despite equity markets rebounding on easing concerns about the likelihood of a trade war between China and USA,” Stephen Innes, APAC trading head at OANDA, said in a note. “Realistically there are plentitudes of market turmoil in the making that continue to make gold the go-to place to hedge risk.”
Against a basket of six other major currencies, the dollar index was flat at 89.043. The index fell to a five-week low of 88.979 on Monday.
Asian share markets rallied on Tuesday with a revival of investor appetite for riskier assets as reports of talks between US and China rekindled hopes a damaging trade war could be averted.
Gold, which is sought as a store of value in times of political and financial uncertainty, becomes less expensive when the greenback weakens.
On Monday, gold prices rose to a more than five-week high after the United States said it would expel 60 Russian diplomats, joining governments across Europe in punishing the Kremlin for a nerve agent attack on a former Russian spy in Britain.
Russia’s Foreign Ministry called the expulsions a “provocative gesture”.
Analysts also see the yellow metal being supported by last week’s statement from the U.S. Federal Reserve which forecast at least two more hikes for 2018 instead of the three that many had expected.
“The Federal Reserve’s March meeting emerged as a turning point for gold,” analysts at UBS said in a note. UBS on Monday raised its three-month forecast range to $1,300-$1,400 per ounce, and six- and 12-month forecasts to $1,375.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.38% to 847.30 tonnes on Monday from 850.54 tonnes on Friday.
In other precious metals, spot silver gained 0.6% to $16.75 per ounce. In the previous session prices hit $16.79, their highest since 7 March. Platinum was up 0.5% at $957 per ounce, while palladium rose 0.3% to $976.47 per ounce. – Neal Bhai Reports (NBR) INDIA
