• Gold prices rose on Monday to their highest in two months as investors sought safer assets amid uncertainty around the economic policies of new U.S. President Donald Trump and as the dollar declined against other major currencies.
Spot gold was up 0.64 percent at $1,217.26 per ounce by 0617 GMT. Earlier in the session, it hit $1,219.43, the highest since Nov. 22.
• The dollar index, which measures the greenback against a basket of currencies, fell by 0.5 percent to 100.230.
• With the lack of a clear policy direction from Trump, the market movement is a sign that risk aversion is back on the table, OCBC analyst Barnabas Gan said.
The market could witness volatility into the first 100 days of the Trump administration, he added.
• Data from U.S. Commodity Futures Trading Commission (CFTC) on Friday underscored investor's bullish gold views. The CFTC reported that speculators raised their net long positions during the week to Jan. 17 in COMEX gold contracts for the second straight week.
• Bank of America Merrill Lynch said last week that precious metal funds had their biggest inflow in five months, according to data through to last Wednesday. Bond funds also notched a fourth consecutive gain over the last week, as investors continued to hedge against the so-called "Trump trades" put on late last year that bet on stronger growth and rising inflation.
• "Tone set by Trump will likely lead the markets to conclude that Trump's legislative goals may now be harder to achieve as there will not be much bipartisan goodwill or a honeymoon period to work with," INTL FCStone analyst Edward Meir said.
"All this means is that investors could now start to coalesce around the notion that the Fed will stay on hold for longer than expected, which in turn should be constructive for gold."
• Among other precious metals, silver rose 0.7 percent to $17.20.
Reference: Reuters
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