Gold at near-four week high as Brexit worries boost safe haven assets
[BENGALURU] Gold hit a near four week high early Monday, supported by weaker Asian stocks as investors turned towards safe haven-assets ahead of this week's central bank meetings and Britain's June 23 referendum on its European Union membership.
Spot gold was nearly flat at US$1,273.36 an ounce by 0105 GMT. Bullion touched a session best of US$1,278.03, its highest since May 18.
US gold was up 0.1 per cent at US$1,276.50. Often perceived as an insurance against economic and financial concerns, gold has risen 5 per cent in June and 20 per cent in 2016 so far.
Asian shares and sterling skidded in early trade on Monday and the perceived safe-haven yen rose.
The safe-haven yen surged to its highest level in three years against both sterling and the euro. The dollar lost 0.4 per cent to 106.60 yen, edging near one-month low of 106.26 touched last Thursday.
The US Federal Reserve, Bank of England, Swiss National Bank and the Bank of Japan will all meet this week. All are expected to hold monetary policy steady against a backdrop of caution about the global economic outlook as well as the impact about a possible "Brexit."
The Bank of Japan may have run into an unexpected obstacle as it considers expanding its extraordinary stimulus programme as soon as next week - the wrath of the country's powerful but typically compliant banks over pushing interest rates deeper into negative territory.
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.74 per cent to 893.92 tonnes on Friday, the highest since October 2013.
Hedge funds and money managers raised their net long position in Comex gold contracts in the week to June 7, and cut their bullish stance in silver, US Commodity Futures Trading Commission data showed on Friday.
Gold discounts in India expanded to their widest in nearly 3-1/2 months this week amid lacklustre demand elsewhere in Asia, with bullion's recent rally dampening retail demand.
REUTERS
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