Spot gold edged up on Monday, as higher oil prices amid the ongoing Middle East crisis and a firm euro on expectations of a European Central Bank rate hike lent support. Upbeat US employment data last Friday, indicating that the global economy was likely on a firm footing, shaved some lustre off gold's demand, but the ongoing Middle East crisis continued to support the precious metal's safe-haven appeal.
"We saw the continuous geopolitical risk in the Middle East crisis, and oil prices going higher. It certainly looks to me that gold has been tracking both oil and euro quite closely in past few days," said Darren Heathcote, head of trading at Investec Australia.
"A great deal of expectations dictate that the ECB will raise interest rates very soon, and probably will continue to raise rates for the rest of the year. A lot of that you may consider already priced in," said Heathcote. Spot gold inched up 0.2 percent to $1,430.40 an ounce by 0636 GMT, after ending the first quarter up 0.7 percent.
US gold gained 0.2 percent to $1,431.90. Spot gold is still biased to rise to $1,447.40 per ounce even after a sharp retracement to $1,412.55 on Friday, said Reuters market analyst Wang Tao. Gold hit a record high at $1,447.40 on March 24. Speculators in gold futures and options raised their net long positions as prices rose to fresh records, data from the US Commodity Futures Trading Commission showed.
Spot silver rose as high as $38.10, just a few cents off a 31-year peak at $38.13. Silver has been the best performer in the precious metals complex, up 23 percent so far this year. Speculative long positions in US gold futures and options rose on high prices, while slipped in silver, according to the US Commodity Futures Trading Commission.
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