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Gold steady, on track for second weekly gain

2017-05-23T143110Z_676311065_RC1D2B5E3600_RTRMADP_3_GOLD-BENCHMARK.JPG
Gold held steady on Friday near a three-week high and was on track for a second consecutive weekly gain, underpinned by a weaker US dollar and US political uncertainty.

[BENGALURU] Gold held steady on Friday near a three-week high and was on track for a second consecutive weekly gain, underpinned by a weaker US dollar and US political uncertainty.

Heightened political concerns surrounding investigations into President Donald Trump's campaign ties with Russia are currently the key driver supporting gold prices, said Stephen Innes, head of trading for Asia Pacific at Oanda in Singapore.

The euro also held near two-year highs against the US dollar on Friday after the head of the European Central Bank said tapering of its stimulus will be on the table this autumn.

A weaker US dollar makes US dollar denominated gold more attractive for buyers using other currencies.

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Spot gold rose 0.1 per cent to US$1,245.01 per ounce at 0401 GMT after touching a three-week high of US$1,247.48 an ounce in the previous session. It is up about 1.4 per cent for the week so far.

US gold futures for August delivery fell 0.1 per cent to US$1,244.70 per ounce.

"What we're seeing right now is the overhang from political risks in the United States," Mr Innes said.

The Republican Party's repeated failures to overhaul the healthcare system and multiple congressional and federal investigations into President Donald Trump's campaign's ties to Russia have cast a shadow over his first six months in office.

The ECB left its ultra easy monetary policy unchanged on Thursday and did not even discuss clawing back stimulus, suggesting it may delay an inevitable decision on tapering bond buys until the latest possible moment.

Spot gold may test a resistance at US$1,250 per ounce, a break above which could lead to a further gain to US$1,261, according to Reuters technical analyst, Wang Tao.

"The gold-silver ratio closed slightly lower today, at 76.05," said analysts at ScotiaMocatta, adding that "resistance is at 77.92, the recent high and support is at 74.82."

Among other precious metals, silver fell 0.1 per cent to US$16.28 per ounce after touching US$16.42 in the previous session, the highest since July 3.

Platinum fell 0.4 per cent to US$922.49 per ounce but was up about one per cent for the week.

Palladium rose 0.4 per cent to US$845.65 an ounce but was down around 1.4 per cent for the week.

REUTERS

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