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Gold rises, hits near 1-week high on weak dollar, geopolitics

Reuters  |  NEW YORK/LONDON 

By and Eric Onstad

NEW YORK/(Reuters) - Gold prices rose on Tuesday, hitting their highest in nearly a week as the U.S. dollar weakened and investors awaited potential U.S. action against suspected use of in

Trump on Monday promised quick, forceful action in response to a deadly suspected attack in Syria, appearing to suggest a potential military response.

"Geopolitics is taking the main driving seat this week, so gold has potentially got some room for the upside," said Jonathan Butler, at in

"A lot will hinge on what is happening geopolitically between Russia, Syria, and all sorts of other countries that could be potentially drawn into this."

Spot gold was up 0.4 percent at $1,341.29 an ounce by 1:35 p.m. EDT (1735 GMT), its highest since April 4.

June U.S. gold futures settled up $5.80, 0.4 percent, at $1,345.90 per ounce.

Gold is often seen as a store of value during times of geopolitical and economic uncertainty.

Gold got a boost as the dollar index dipped to a two-week low against a basket of currencies. The dollar had risen earlier after Chinese Xi Jinping's promise to cut import tariffs eased concerns about a trade conflict.

Jinping's comments spurred a rally in global equity markets, that capped gold's safe haven appeal despite the weakening dollar, said of RJO Futures in

"The upside has been limited due to the fact that appears to be offering some concessions to the trade war," he said. He said gold could move higher if trade tensions re-escalate or if bullion reaches $1,350, near the top end of its latest trading range.

Silver gained 0.7 percent at $16.57 an ounce. The session high was $16.65, a one-week high.

fell 0.1 percent at $930.80 an ounce, while palladium rose 2.3 percent at $950.72 an ounce, after touching $961.30, a 12-day high.

fell back to a discount to palladium, after rising to a premium last Thursday. Last September, palladium gained the upper hand over for the first time in 16 years.

"We are not convinced the platinum-palladium ratio can hold consistently above parity this year as strong trends in the auto sector which have weighed on the ratio remain in place," said in a note.

Diesel vehicles use mostly in catalytic converters while petrol cars largely use palladium, but diesel sales in Europe's largest have been falling.

(Additional reporting by and in Bengaluru; Editing by and Keith Weir)

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

First Published: Tue, April 10 2018. 23:22 IST
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