Gold prices were flat on Wednesday, hovering near a one-week high on a weaker dollar following US Secretary of State Rex Tillerson's sudden dismissal, which invigorated concerns of protectionist policies hampering global risk appetite. Spot gold was unchanged at $1,325.93 per ounce at 0735 GMT. It touched $1,330.02 an ounce during the session, its highest since March 7.
US gold futures for April delivery fell 0.1 percent to $1,326.30 per ounce. On Tuesday, President Donald Trump fired Tillerson after a series of public rifts over policy on North Korea, Russia and Iran, replacing his chief diplomat with loyalist CIA Director Mike Pompeo. Risk aversion is back on the table following the unexpected news of Tillerson's dismissal and the appointment of Pompeo, said OCBC analyst Barnabas Gan.
"Pompeo is a supporter of Trump's trade policy and could help advance his agenda of imposing it on US trading partners ... all this uncertainty and risk aversion leaves gold as a safe haven option," Gan added. Spot gold may rise to $1,334 per ounce, as it has cleared a resistance at $1,327, according to Reuters Technical analyst Wang Tao.
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