Gold jumped more than 1 percent to its highest in nearly eight weeks on Tuesday after US President-elect Donald Trump said the dollar was "too strong", sending the greenback lower. Spot gold rose 0.7 percent to $1,217.11 per ounce by 1335 GMT, after touching a Nov. 22 high of $1,218.64 ounces.
US gold futures were up 1.3 percent at $1,210.70 per ounce. The dollar, in which gold is priced, fell half a percent to six-week lows against major currencies.
"Trump's stance on trade and protectionism has been well aired and it will always be a key factor. But until we get more clarity on what exactly it means, this should help to underpin gold," said Societe Generale Head of Metals Research Robin Bhar.
In an article in the Wall Street Journal, Trump said the strength of the US dollar against China's yuan "is killing us".
Gold is often seen as an alternative investment during times of geopolitical and financial uncertainty while riskier assets such as stocks are hit.
"This year there are lots of uncertain political events, including elections, so if you looking for a bit of a refuge from stormy seas gold will be one of those safe assets that you would park some money in," Bhar said.
Also boosting gold is uncertainty over Trump's plans for the US economy after his inauguration on Friday.
Trump's campaign calls for tax cuts and more infrastructure spending have boosted US shares and the dollar, as well as driving a selloff in Treasuries, but his protectionist statements and a flurry of off-the-cuff Tweets have kept many investors from adding to risky positions, instead opting for gold.
Trump's "unorthodox view of the world is certainly going to contribute to much more volatility in the markets next year," said INTL FCStone analyst Edward Meir.
Meanwhile, Prime Minister Theresa May said Britain would make a definitive exit from the European Union and parliament would be given a vote on its final terms, seen as a steadying influence, and sending the pound higher. Gold, which had soared in anticipation of May's speech, retreated slightly on profit taking, analysts said. Investor interest in gold was indicated as holdings of the largest physically-backed ETF, New York's SPDR Trust, on Friday rose for the first time since Nov. 9, the day after Trump's election victory.
Credit Suisse said in a note it remained "constructive" on gold prices, forecasting an average of $1,338/oz in 2017.
Spot silver was up 1.7 percent at $17 an ounce, after scaling a one-month high. Platinum hovered near $986 per ounce after touching a two-month high. Palladium added 1.3 percent at $754.
Comments
Comments are closed for this article.