Global political tension buoys gold
Metal is steady, after dipping in the previous session, as turbulence in currency markets and political tension provide support
Bengaluru — Gold prices held broadly steady in Asia on Friday after dipping the session before, drawing little support from global political tension and turbulence in currency markets.
Spot gold was flat at $1,212.12/oz at 3.21am GMT, having lost 0.1% on Thursday.
US gold futures were steady at around $1,219.6/oz.
"We’re looking for a direction in the US dollar to really dictate price action [in gold] today," ANZ analyst Daniel Hynes said, adding geopolitical issues around, in emerging markets in particular, were unlikely to provide a boost to prices.
The US dollar, in which gold is priced, was down about 0.2% at ¥110.90. The greenback, however, hovered just short of a 13-month high against a basket of peers as European currencies such as the pound and euro continued to lose traction.
Meanwhile, fresh US sanctions against Moscow drove down Russia’s rouble to a near two-year low, while the Turkish lira plumbed a record low in the wake of a diplomatic rift with the US.
Gold prices, which can gain during uncertainty, have largely failed to benefit from rising geopolitical tensions this year, as investors have chosen the safety of the dollar over the precious metal.
Also adding pressure on gold was the expectation of higher interest rates in the US, where the Federal Reserve is expected to raise benchmark lending rates in September — the third time in 2018.
The US economy is performing "very well" with continued growth clearing the way for one or two more interest rate hikes in 2018, Chicago Federal Reserve Bank President Charles Evans said on Thursday in an interview in which he dismissed earlier concerns about weak inflation.
Higher US rates tend to boost the dollar and treasury yields, adding pressure on greenback-denominated, non-yielding bullion.
Spot gold looks neutral in a range of $1,206/oz-$1,220/oz, and an escape could suggest a direction, Reuters technicals analyst Wang Tao said.
In other metals, silver edged up 0.1% to $15.42/oz.
Platinum was up 0.3% at $833.10, while palladium was 0.4% lower at 903.75.