LONDON: Gold touched a near one-week high on Monday as investors opted for safe-haven assets on political uncertainty in Italy and fears of a potential escalation of a simmering global trade war but a stronger dollar kept gains in check.
Gold is often seen as an alternative investment during times of geopolitical and financial uncertainty, benefiting along with other haven assets such as the Japanese yen and US Treasuries while stocks tend to trend lower.
Spot gold was up 0.1 percent at $1,323.25 per ounce by 1222 GMT after touching its highest since Feb. 27 at $1,327.86.
US gold futures for April delivery rose 0.1 percent to $1,324.40 per ounce.
"There are fears that a global trade war or protectionist measures will undermine global growth," said Societe Generale's head of metals research Robin Bhar. "People have wanted gold as a hedge against those looming uncertainties."
US President Donald Trump last week announced plans to levy hefty tariffs on aluminium and steel imports which were followed by threats of retaliation from the EU and Canada.
In Italy, voters delivered a hung parliament on Sunday and if early projections are confirmed, none of Italy's three main groups will be able to rule alone and there is little prospect of a return to mainstream, moderate government.
The dollar index gained 0.1 percent, having touched its lowest in almost a week earlier in the session, putting a cap on gold's gains.
Gold output from Australia, the world's second-largest producer, may rise to a record as a stream of new projects comes on line, Australian mining consultancy Surbiton Associates said on Sunday.
Hedge funds and money managers increased their net short position in silver contracts to a record high in the week to Feb. 27, US Commodity Futures Trading Commission (CFTC) data showed on Friday, while cutting net long positions in gold.
Platinum, used to reduce emissions in diesel cars, inched up 0.4 percent to $966.20 per ounce, while palladium slipped 0.3 percent to $988.55.
Putting pressure on platinum group metals (PGMs) was data that showed car sales in the United States were lower in February and the mayor of Rome said it would ban diesel cars by 2024, MKS SA senior precious metals dealer Alex Thorndike said.
Comments
Comments are closed for this article.