New York - Gold crept higher as investors on Friday opted for the
safe haven qualities of bullion due to uncertainty about US and European politics as well as the direction of stock markets.
Global equity markets lost momentum after setting record highs in the previous two sessions, partly due to disquiet about the policies of US President Donald Trump.
“Gold is close to its recent multi-month high despite the strong dollar, due to an increase in volatility on the equity markets and more uneasiness on the political front, which is supporting the search for safe-haven assets,” said Eugen Weinberg, head of commodity research at Commerzbank.
Spot gold gained 0.2 percent to $1241.66 per ounce by 1036 GMT, while US gold futures added 0.1 percent to $1242.80.
Gold, on track for a third week of gains, has risen about 7.5% in 2017.
Concern over Trump’s policies, as well as elections in the Netherlands, France and Germany this year, fuelled gold’s rise to a peak of $1244.67 on February 8, the strongest in nearly three months.
“Dealers are extremely cautious about running the market higher as the March Fed rate hike debate will likely play out for the foreseeable future,” said Stephen Innes, senior trader at OANDA.
The dollar index, which measures the greenback against a basket of currencies, rose 0.2 percent to 100.68 on Friday.
Holdings of SPDR Gold, the world’s largest gold-backed exchange-traded fund (ETF), have risen 5.6 percent so far this month, the most since June.
“The market seems to be quite supported by investment inflows into the ETFs and I think this will be the most important factor through the year as we expect investors to keep pouring money into gold ETFs,” Weinberg added.
Commerzbank expects gold to hit $1 300 by year end.
Spot silver dipped 0.4 percent to $18.01 an ounce.
The metal hit its strongest since November 11 at $18.13 in the previous session. Platinum gained 0.3 percent to $1015.50
Palladium fell 0.3 percent to $790.22.
The metal, used in emission-controlling catalytic converters for the car industry, touched its best since January 24.