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PRECIOUS-Gold shines as geopolitical worries weigh on riskier assets
August 18, 2017 / 10:06 AM / 2 months ago

PRECIOUS-Gold shines as geopolitical worries weigh on riskier assets

    * Spot gold set for weekly gain
    * Palladium touches 16-year high

 (Updates prices)
    By Zandi Shabalala
    JOHANNESBURG, Aug 18 (Reuters) - Gold jumped to its highest
in more than nine months on Friday as the dollar retreated on
political uncertainty in the United States and a suspected
Islamist attack in Spain boosted bullion's safe-haven appeal.
    Spot gold        touched its highest since Nov. 9 at
$1,300.80 per ounce, and by 1333 GMT was trading up 0.8 percent
at $1,298.51.
   "There is clearly more for financial markets to be concerned
about," Danske Bank analyst Jens Pedersen said, referring to
U.S. political uncertainty and the attack in Spain. "That has
led to a risk-off environment, and that's supportive for gold."
    Spain mounted a sweeping anti-terrorism operation on Friday
after a suspected Islamist militant drove a van into crowds in
Barcelona, killing 13 people in what police suspect was one of a
planned wave of attacks.             
    Markets were also uncertain about U.S. President Donald
Trump's ability to push ahead with policies after the
disbandment of two high-profile business advisory councils over
his remarks on violence in Virginia.             
     U.S. gold futures         for December delivery were up 1
percent at $1,305.
    The dollar fell to a four-month low against the Japanese
yen, which along with gold is often seen as a safe-haven in
times of political and economic turmoil.       
    Meanwhile, world stocks fell for a second straight session
as investors piled into German and U.S. Treasury
bonds.            
    "The discord coming out of Washington could prove supportive
for gold as well, as this could pressure the dollar further,
just as the Fed is casting fresh doubts about its (interest)
rate timetable," said INTL FCStone analyst Edward Meir.
    Policymakers in Europe and the U.S. expressed concerns about
unwinding monetary stimulus too soon.                           
 
    Gold is sensitive to rising interest rates because they push
up bond yields, increasing the opportunity cost of holding
non-yielding bullion while tending to strengthen the dollar, in
which gold is priced.
    Spot gold faces resistance at $1,291 an ounce and could
hover below this level or retrace towards support at $1,271
again, said Reuters technical analyst Wang Tao.             
    Among other precious metals, silver        climbed 1 percent
to $17.17 an ounce, having touched a two-month high of $17.25. 
    Platinum        was up 1.2 percent at $974.80, on track for
a third straight week of gains.
    Palladium        touched a 16-year high of $934 before
giving back some gains to trade 0.2 percent up at $927, on
course for a weekly gain of about 4 percent.

 (Additional reporting by Apeksha Nair and Arpan Varghese in
Bengaluru; Editing by David Goodman and David Evans)
  

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