Gold price hits five-month high as Trump comments hurt dollar

New York (April 13) Gold rallied to a five-month high on Thursday, on track for its best week since June, after the previous day's comments by U.S. President Donald Trump on
the the strength of the dollar knocked the currency lower. 

The dollar came under heavy pressure along with Treasury yields after Trump said that strength in the U.S. currency would eventually hurt the economy.            

With concerns over North Korea and the Middle East already supporting gold, the currency nudged up to its strongest since early November at $1,288.64 an ounce before steadying in later
trade.

Spot gold was up 0.1 percent at $1,286.87 an ounce by 1150 GMT, while U.S. gold futures for June delivery gained $10.90 to $1,289.00.

"Gold's recapture of $1,280 for the first time since
November is significant, as it opens up a trading range
potentially to $1,300," Mitsubishi analyst Jonathan Butler said.
    "However, gold is now moving into overbought territory on a
short-term relative strength index basis, and there is elevated
risk of profit-taking from here. Nonetheless, risk aversion
should continue to support gold in the medium term."
    Trading volumes in wider markets have been light ahead of
Easter, with most financial markets closed from the Good Friday
holiday.
    Trump's comments put the U.S. dollar and Treasury yields on
track for their biggest weekly declines this year, while stock
markets fell half a percent in Europe.            
    Fears of a new weapons test by North Korea as a U.S. carrier
group sailed towards the region, as well as worries about the
forthcoming French presidential election, also kept investors on
edge.            
    Russian President Vladimir Putin said on Wednesday that
trust had eroded between the United States and Russia under
Trump, as Moscow delivered an unusually hostile reception to
U.S. Secretary of State Rex Tillerson in a face-off over Syria.
           
    "We remain constructive on gold (given) elevated political
tensions in both Korea and Syria, coupled with a lower drift
evident in U.S. equity markets," INTL FCStone said in a note.
    Among the major physical gold markets, the precious metal
was sold at a discount to spot prices in India this week for the
first time in six weeks, while demand elsewhere in Asia remained
subdued as surging bullion prices deterred buyers.        
    Among other precious metals, silver        was up 0.5
percent at $18.55, off an earlier five-month high of $18.599.
Platinum        was 0.6 percent higher at $974, while palladium
rose 1.5 percent to $808.90.

Source: Reuters