Gold prices rise for a third day, buoyed by geopolitical worries



Fri, 18 Aug 2017 - 10:47 GMT


Fri, 18 Aug 2017 - 10:47 GMT

A salesman displays a tray of gold bangles for the camera at a jewellery shop in Singapore October 7, 2009. REUTERS-Vivek Prakash

A salesman displays a tray of gold bangles for the camera at a jewellery shop in Singapore October 7, 2009. REUTERS-Vivek Prakash

BENGALURU - August 2017: Gold rose for a third day on Friday amid weaker Asian stocks, with some investors gravitating towards safe-haven assets on political uncertainty in the United States and after a terrorist attack in Spain killed 13 people.

Spot gold climbed 0.3 percent to $1,291.65 per ounce by 0703 GMT, after climbing for two straight days.

Asian stock investors joined a global retreat from riskier assets on Friday and the dollar wavered on growing doubts about U.S. President Donald Trump's ability to fulfil his economic agenda.

Markets were further shaken as Spain mounted a sweeping anti-terror operation on Friday after a suspected Islamist militant drove a van into crowds in Barcelona, killing 13 people before fleeing.

"The risk factors, including the Trump administration, geopolitical tensions and diplomatic crises, all are now in an evolving state. I don't think they have been solved or discounted yet," Mark To, head of research at Hong Kong'sWing Fung Financial Group, said.

There are increasing concerns around the Trump administration's ability to push ahead with its policies following the disbandment of two high-profile business advisory councils over the president's remarks on violence in Virginia.

"The ongoing discord coming out of Washington could prove supportive for gold as well, as this could pressure the dollar further just as the Fed is casting fresh doubts about its rate timetable," INTL FCStone analyst Edward Meir said.

Policymakers in Europe and the U.S. expressed concerns about unwinding monetary stimulus too soon.

Gold is sensitive to rising interest rates because they push up bond yields, increasing the opportunity cost of holding non-yielding bullion, and tend to strengthen the dollar, in which gold is priced.

"Over the medium-term, gold is likely to continue trading in the $1200 to $1300 range, with possible monetary tightening by the Fed limiting the upside," Wing Fung's To said.

Spot gold faces resistance at $1,291 per ounce and it may hover below this level or retrace towards support at $1,271 again, Reuters technical analyst Wang Tao said.

Among other precious metals, silver climbed 0.4 percent to $17.07 per ounce, while platinum was up 0.7 percent at $979.45 an ounce.

Palladium gained 0.1 percent to $927.10 an ounce, after hitting its highest since February 2001 at $930.00 in the previous session. The metal is on track to register a weekly gain of about 4 percent.



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