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Gold hits 1-month high, geopolitical tensions support
[BENGALURU] Gold edged up to touch a one-month high on Tuesday, with investors turning to the safe-haven asset as geopolitical tensions sapped their appetite for risk.
Spot gold had risen 0.1 per cent to US$1,267.70 per ounce by 0349 GMT. It earlier touched its strongest since May 1 at US$1,270.47.
US gold futures were almost unchanged at US$1,267.70 an ounce.
Risk surrounding the closeness of Britain's upcoming elections, the prospect of early elections in Italy and worries over Greek debt were supporting gold, said Jeffrey Halley, a senior market analyst at Oanda.
"The picture will get more muddy as the week goes on as we have a lot of data from around the world coming in," he said.
British Prime Minister Theresa May's lead over the opposition Labour Party dropped to 6 percentage points in a poll published on Tuesday, with the election due next week.
In Italy, former prime minister Matteo Renzi suggested on Sunday that the country's next election be held at the same time as Germany's amid mounting speculations that Italians could head to the polls in the autumn. Germany will vote on Sept 24, while elections are due in Italy by May 2018.
Meanwhile, euro zone finance ministers failed to agree with the International Monetary Fund last week on Greek debt relief as well as failing to release new loans to Athens.
"The ongoing political uncertainty in the market is really driving safe-haven buying at the moment," said ANZ analyst Daniel Hynes.
"Weaker equity markets certainly have played their part, but support from that has been sporadic and we're continuously seeing a strong level of safe-haven demand being the primary driver still."
Gold is used as an alternative investment during times of political and financial uncertainty.
Spot gold may rise to US$1,276 per ounce, as suggested by its wave pattern and a Fibonacci ratio analysis, according to Reuters technical analyst Wang Tao.
In wider markets, the geopolitical fears over Europe weighed on Asian stocks and kept the euro under pressure.
Among other precious metals, silver marked its highest level since April 27 at US$17.45 an ounce. It was last up 0.4 per cent at US$17.43.
Palladium was down 0.3 pct at US$794.55 after breaching US$800 an ounce on Monday. Platinum was unchanged at US$952.70 an ounce.