Gold price edges up as geopolitical worries spur safe-haven buying
London (April 11) Gold edged up on Tuesday as rising political tensions over North Korea and the Middle East buoyed safe-haven demand for the metal.
Spot gold was up 0.3 percent at $1,257.88 per ounce by 0744 GMT, while U.S. gold futures rose 0.5 percent to $1,259.50.
Heightened tensions in the Korean peninsula and Middle East following U.S. strikes on Syria, along with the upcoming French presidential election, have made investors nervous.
"Gold should retain a measure of support given the political tensions," said INTL FCStone analyst Edward Meir. Meanwhile, the Federal Reserve plans to raise U.S. interest rates gradually so as to sustain healthy growth without letting the economy overheat, Fed Chair Janet Yellen said on Monday.
Rising interest rates lift the opportunity cost of holding
non-yielding bullion.
"Rallies above $1,260 could be hard to sustain, as gold
lacks momentum from a technical perspective," said Jeffrey
Halley, senior market analyst at OANDA.
"A break of $1,240 will prelude a deeper correction."
Gold has been failing to break key chart resistance at its
200-day moving average.
"Geopolitical developments are likely to continue to provide
an underlying level of support over the short term, however the
continued failed breaks above the 200-day moving average do not
instil confidence in the metal's ability to break higher out of
the recent range," MKS PAMP Group trader Sam Laughlin said.
Spot gold is still targeting $1,241 per ounce, as suggested
by its wave pattern and a Fibonacci retracement analysis, said
Reuters technical analyst Wang Tao.
Holdings of SPDR Gold Trust , the world's largest
gold-backed exchange-traded fund, rose 0.21 percent to 838.26
tonnes on Monday from 836.49 tonnes on Friday.
Spot silver edged up 0.2 percent to $17.95 an ounce.
In the previous session, it marked its lowest in over two weeks
at $17.71.
Platinum rose 1 percent to $945.60 an ounce, after
hitting its weakest in over three weeks at $931.85 on Monday.
The spread between gold and platinum hit its highest since
October 2016 at $318.23.
"There is certainly more geo-political risks at the moment
and that is more positive (for) gold than platinum and there is
no surprise in that sense to see the spread widen...There is
generally a downbeat (sentiment) about diesel cars in Europe," a
London-based market analyst with a mining company said.
Platinum is used as a leading catalyst in diesel-powered
vehicles, which is going out of favour in Europe.
Palladium rose 0.6 percent to $792.80.
Source: Reurers
