Gold reached its highest in 3-1/2 months on Friday as the dollar fell to a one-week low after the new US Treasury chief poured cold water on the "Trumpflation trade" that had boosted the greenback this year. Treasury Secretary Steven Mnuchin said on Thursday that any steps US President Donald Trump's administration takes on policy would probably have only limited impact this year, though he wants to see tax reform passed by August.
The comments suggested much work was still needed on the sweeping tax plan that Mnuchin called his main priority, and which investors had bet would stoke growth and inflation this year. "We've got a vacuum of (US domestic) policy, real (interest) rates going down, the dollar going sideways and geopolitical (jitters) around the world ... all helping gold," ICBC Standard Bank analyst Tom Kendall said.
Spot gold was up 0.6 percent at $1,256.75 an ounce by 2:26 p.m. EST (1926 GMT), having touched its highest since Nov. 11 at $1,260.10 earlier, zeroing in on the 200-day moving average. It was on track to finish the week higher for the fourth straight week. US gold futures settled up 0.55 percent at $1,258.30. Tempering gains in bullion, a poll on Friday suggested French presidential candidate Emmanuel Macron would beat far-right leader Marine Le Pen, who has promised a referendum on European Union membership.
Holdings of the largest gold-backed exchange-traded fund, New York's SPDR Gold Trust, have risen more than 5 percent this month on geopolitical risk. "These dollar-denominated and perceived safe-haven precious metals have risen during a time when Wall Street has repeatedly hit new all-time highs and despite the dollar holding near its multi-year highs," said Fawad Razaqzada, technical analyst for Forex.com, adding that precious metals appeared poised to rise further in the coming weeks.
Silver rose 0.8 percent to $18.30 per ounce, having touched its highest in 3-1/2-months at $18.40. Silver has gained about 1.8 percent this week in what could be its ninth straight weekly gain. Platinum rose 1.8 percent to $1,023.75 per ounce, after hitting its highest since early October at $1,028.60. Palladium fell 0.7 percent to $767.25.
Comments
Comments are closed for this article.