Spot gold was up 0.4% at $1,403.88 per ounce as of 0701 GMT, heading for a fifth straight session of gains. Gold prices hit $1,410.78 on Friday, their highest since Sept. 4, 2013.
U.S. gold futures rose 0.5% to $1,407.10 an ounce.
· U.S. President Donald Trump said on Sunday he was not seeking war with Tehran, but tensions remain high between the longtime foes with Washington due to announce “significant” sanctions on Iran on Monday.
· “We are just seeing continued improvement in sentiment built around the more dovish tone from central banks, but clearly the safe-haven buying has also picked up with the U.S.-Iran tensions escalating over the weekend,” ANZ analyst Daniel Hynes said.
“Gold surpassed some fairly good support levels, so (I) do feel like prices will broadly hold above the $1,400 level. At some point we might see a pullback as investors lock in profits.”
· The U.S. Federal Reserve and the European Central Bank last week hinted that they were open to ease policies to counter a global economic slowdown, exacerbated by global trade tensions.
Helping bullion’s appeal, the dollar index fell to a three-month low against a basket of currencies on bets the U.S. central bank would start lowering interest rates as early as next month.
· “We remain cautiously optimistic on gold as a weaker dollar should provide the precious metal with a robust tailwind for now,” INTL FCStone analyst Edward Meir said in a note.
· The market’s focus now shifts to whether Washington and Beijing can resolve their trade dispute at a summit in Japan this week of leaders from the Group of 20 leading world economies.
Chinese President Xi Jinping will attend the G20 summit in Japan this week, state-run Xinhua news agency said on Sunday, giving the first official confirmation of his attendance at a gathering where he is expected to meet Trump.
· Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 4.57% on Friday from a day earlier, in their biggest one-day percentage gain since September 2008.
· “Strong performance in equity markets has hindered gold’s rally in the past. Those issues around economic growth and potential for lower interest rates have cuddled back the rally in stock markets, that’s seen investors rotate back into gold-backed ETFs,” ANZ analyst Hynes said.
· Gold is headed toward its strongest week in three years, and Wall Street and Main Street look for the party to continue, according to the weekly Kitco News gold survey.
The big catalyst for this week’s rise to five-year highs was dovish communication from the Federal Open Market Committee. Policymakers left interest rates unchanged after a two-day meeting but took steps toward setting up markets for rate cuts, removing wording saying they would be “patient” when adjusting monetary policy and saying they see “uncertainties” about the economic outlook and thus “will act as appropriate to sustain the expansion.”
This came after European Central Bank President Mario Draghi also hinted at rate cuts. Additionally, tensions between the U.S. and Iran were heightened after Iran shot down a U.S. military drone in the Middle East.
· “Gold is definitely in breakout mode [higher],” said Phil Flynn, senior market analyst with at Price Futures Group. “The sleeping giant has awoken, spurred by the Fed’s and ECB’s more dovish rate outlook, along with a spattering of geopolitical risk. Things are heating up in Iran.”
Jim Wyckoff, senior technical analyst with Kitco, said bulls have the momentum.
· Among other precious metals, silver edged 0.1% higher to $15.37 per ounce and platinum was up 0.9% at $812.63.
Palladium rose 1.1% to $1,516.70 an ounce
Reference: Kitco, Reuters
Thai
Eng