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Gold hits one-week peak on dollar weakness, geopolitical concerns

Reuters  |  BENGALURU 

By Verma

BENGALURU (Reuters) - Gold prices touched a one-week high on Wednesday, as the dollar fell to two-week lows and as a host of geopolitical factors stoked demand for the safe-haven

Spot gold rose 0.4 percent to $1,344.16 an ounce as of 0704 GMT, its fourth straight session of gains. Prices earlier hit a one-week high of $1,345.35 an ounce.

U.S. gold futures gained 0.2 percent at $1,348 an ounce.

"Lots of things are happening at the same time - the (U.S.-China) trade war, a possible U.S. attack on that navigates to conflict between the and Russia, and that has a very strong impact on gold markets," said Yuichi Ikemizu, at

and the tangled on Tuesday at the over the use of in as and its allies considered whether to strike at Bashar al-Assad's forces over a

"Dollar price movements and political developments are driving markets right now, including gold," said Jordan Eliseo, at Bullion.

The dollar index, which measures the greenback against six other major currencies, was down 0.1 percent at 89.518, after earlier falling to 89.472, its weakest since March 28.

A weaker dollar makes bullion cheaper for holders of other currencies.

"In the short-term, gold may well remain range-bound as it has for some time, though there are no shortages of catalysts that could send it higher," Eliseo said.

Spot gold may retest a resistance at $1,354 per ounce, said Reuters'

On Tuesday, U.S. welcomed Chinese Xi Jinping's promise to open China's economy further, reinforcing a view that a full-scale trade war can be averted.

"Tensions between and the U.S. seem to be relaxing after Xi's conciliatory note, but with the Trump administration, people are not really sure what is going to happen next," Ikemizu said. "So, investors want to hold positions in gold."

Gold is often seen as a safe investment during times of political and financial uncertainty.

Markets are also waiting for cues on the outlook for U.S. monetary tightening from consumer inflation data and minutes from the Federal Reserve's March meeting, due later on Wednesday.

Tighter monetary policy raises the opportunity cost of holding non-yielding bullion.

In other precious metals, silver rose 0.3 percent to$16.60 an ounce.

climbed 0.7 percent to $930.15 an ounce, while palladium fell 0.3 percent to $949.50 an ounce.

(Reporting by Verma in BENGALURU; Editing by and Biju Dwarakanath)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, April 11 2018. 13:04 IST