Gold edges higher as investors remain wary
Bengaluru — Gold prices edged higher on Thursday as investors preferred to stay put with safe-haven assets even though the chances of an escalation in the US-Iran conflict waned after the two sides softened their stance.
Spot gold was up 0.3% at $1,560.36/oz by 3am GMT. Prices hit their highest since March 2013 at $1,610.90 on Wednesday. US gold futures were flat at $1,560.50.
President Donald Trump said on Wednesday the US did not necessarily have to respond militarily to Iran’s attack on US troops in Iraq, while Iranian foreign minister Mohammad Javad Zarif said the strikes “concluded” Tehran’s response to the killing of commander Qassem Soleimani.
“The subsequent rhetoric seems to suggest that they (Iran) are not going to follow on, similarly Trump signalled that there is no immediate intent to respond militarily, so there is a degree of relief in markets,” said Ilya Spivak, a senior currency strategist at DailyFx. “We did not see an immediate escalation, although it would not be accurate to say that it cannot happen for sure, there is that risk.”
Gold, considered a safe investment in times of political and economic uncertainty, had risen as much as 2.4% on Wednesday and surpassed the key $1,600 level after Iran’s retaliatory attacks. Limiting gold’s advance, Asian stocks rallied on the easing concerns of conflict. "… lingering geopolitical concerns around the Middle East are keeping a bid under gold”, Stephen Innes, a market strategist at AxiTrader, said in a note. “Gold bulls are still buying at the critical support level as back-burner influences around trade and US data uncertainty continues to argue for gold in the portfolio even as oil prices sell off, and US equities are back near record highs.”
Investors also took stock of data from China, where producer prices in December fell 0.5% from a year earlier, marking the sixth month of contraction as manufacturers struggled with weak demand and the trade war. Holdings of the world’s largest gold-backed exchange-traded fund SPDR Gold Trust fell 1.05% to 886.81 tons on Wednesday.
Among other precious metals, palladium hit a record peak of $2,149.50/oz on sustained supply concerns, and was last up 1.2% to $2,129/oz. Silver gained 0.3% to $18.14/oz, after hitting its highest since September at $18.85 on Wednesday, while platinum rose 0.5% to $958.73.
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.