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PRECIOUS-Gold climbs to 1-week high after Yellen, Draghi comments
August 28, 2017 / 4:11 AM / 3 months ago

PRECIOUS-Gold climbs to 1-week high after Yellen, Draghi comments

    * Spot gold may breach $1300/oz- analyst
    * Silver touches 1-week high
    * Geopolitical risks continue to underpin bullion

 (Adds comment, updates prices)
    By Apeksha Nair
    BENGALURU, Aug 28 (Reuters) - Gold rose to its highest in
over a week on Monday as the dollar hoarded losses after
comments from key central bankers at an economic policy meeting
in the United States boosted the Euro.    
    Spot gold        rose 0.5 percent to $1,297.60 an ounce by
0651 GMT, after reaching its highest since Aug. 18 at $1,298.58
earlier. It gained nearly 0.4 percent in the previous session. 
    U.S. gold futures         for December delivery were up 0.4
percent to $1,302.90 per ounce.
    At the meeting in Jackson Hole on Friday, Yellen made no
reference to U.S. monetary policy but instead focused on
financial regulations, leading traders to expect a slowing in
further interest rate hikes.                          
    Later in the day, European Central Bank Chief Mario Draghi
said the bank's ultra-loose monetary policy was working and that
the euro zone's economic recovery has taken hold, but refrained
from commenting on the single currency's recent strength.
            
    "The rhetoric surrounding Jackson Hole was in part an
optimistic one, owing to the ECB president's comment that
'global recovery is firming up' while the euro area growth was
'gaining ground'," OCBC analyst Barnabas Gan said. 
   "...Yellen and Draghi remained ambiguous over monetary policy
strategies, thus giving market players the reason to lift gold
prices on monetary policy uncertainty."
    Gold is highly sensitive to rising rates, which lift the
opportunity cost of holding non-yielding assets such as bullion,
while boosting the dollar, in which it is priced.
    The euro on Monday surged to its highest in over 2-1/2 years
against the dollar, with the greenback also pressured by
concerns over the impact of Tropical Storm Harvey on the U.S.
economy.       
    "Gold prices could breach $1,300 per ounce this week should
safe haven demand stay supported on Trump's threat to quit NAFTA
amid North Korean tensions," Gan said. 
     U.S. President Donald Trump renewed his threat to scrap
NAFTA and ripped on trading partners Canada and Mexico in a
tweet on Sunday, days before a second round of negotiations on
rewriting the 23-year-old agreement.              
    "Political uncertainty remains high and continues to provide
a strong level of support to prices," ANZ analyst Daniel Hynes
wrote in a note.   
    Speculators raised their net long position in COMEX gold for
the sixth straight week in the week to Aug. 22.        
    Meanwhile, silver        was up 0.5 percent to $17.15 an
ounce, after earlier touching its best since Aug. 18 at $17.21.
    Platinum        rose 0.8 percent to $979.45 an ounce, while
palladium        inched 0.2 percent higher at $930.55.

 (Reporting by Apeksha Nair in Bengaluru; Editing by Richard
Pullin and Sunil Nair)
  

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