January 30, 2017 / 4:00 AM / 2 years ago

PRECIOUS-Gold up on weaker dollar, Trump uncertainty

* Investors turn to safe-haven gold on US policy uncertainty
    * Speculators lower net long position in gold futures,
options
    * Palladium climbs from weakest in over 3 wks hit in prev
session
    * Dollar index down 0.3 percent

 (Adds comment, detail)
    By Arpan Varghese
    Jan 30 (Reuters) - Gold prices edged up on Monday, supported
by a weaker dollar and as uncertainty over the outlook for U.S.
policy under President Donald Trump stoked safe-haven demand.
    Spot gold had risen 0.22 percent to $1,193.88 per
ounce by 0257 GMT, while U.S. gold futures were up 0.45
percent at $1,193.70.
    The dollar index, which measures the greenback
against a basket of currencies, was down 0.3 percent at 100.230.
    Trump's administration on Sunday tempered a key element of
his move to ban entry of refugees and people from seven
Muslim-majority countries in the face of mounting criticism even
from some prominent Republicans and protests that drew tens of
thousands in major American cities. 
    "We've seen a rise in the amount of safe-haven buying in the
past few weeks around the critical uncertainty in the U.S. and
Europe, and the executive order signed by Trump has raised the
uncertainty even higher," said ANZ analyst Daniel Hynes.
    Trump's protectionist statements and a lack of detail on
policy have led some investors to opt for gold, which is often
seen as an alternative investment in times of geopolitical and
financial uncertainty.
    The upturn in safe-haven buying comes at a time when
physical demand has been sapped due to the Lunar New Year
holiday in Asia, Hynes added.
    The market for the precious metal has also been supported by
sluggish U.S. economic data released on Friday.
    Economic growth in the country slowed sharply in the fourth
quarter as a plunge in shipments of soybeans weighed on exports,
the data showed. 
    "That puts just enough doubt into the industry's mind about
the timing of (U.S. interest) rate hikes," Hynes said.
     Gold is highly sensitive to rising U.S. rates, which
increase the opportunity cost of holding the non-yielding asset
while boosting the dollar, in which it is priced.
    Meanwhile, holdings of the largest gold-backed
exchange-traded-fund (ETF), New York's SPDR Gold Trust GLD,
remained unchanged on Thursday from Wednesday. 
    Hedge funds and money managers crimped their net long
position in gold futures and options, following two straight
weeks of increases. They also raised their silver holdings to
the highest level since early November, data showed. [CFTC\]
    Spot silver remained unchanged at $17.12 per ounce at
0230 GMT on Monday.
    Platinum rose 0.05 percent to $984.10 per ounce,
while palladium dropped 0.18 percent to $734.65 per
ounce.

 (Reporting by Arpan Varghese in Bengaluru; Editing by Joseph
Radford)
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