Gold climbed on Monday to its highest in more than seven weeks on buying fuelled by political uncertainty after comments by US President-elect Donald Trump on Nato and China. Spot gold was up 0.5 percent at $1,202.8 an ounce by 1:58 pm EST (1436 GMT) from an earlier $1,197.26, its highest since Nov. 23. US gold futures were up 0.5 percent at $1,202.60.
Last week Trump said that the "One China" policy on Taiwan was up for negotiation. China retaliated by saying it would "take off the gloves" and act strongly if Trump continues to provoke once he takes office. His comments on Nato being obsolete have also made investors nervous.
"There's the tussle between China and the United States over Taiwan. Trump has been talking to Taiwan, which the Chinese don't like. His comments on Nato are seen as negative," said Julius Baer analyst Carsten Menke. Investor interest was indicated by the largest physically backed exchange-traded fund, New York's SPDR Trust, holdings of which rose for the first time since Nov. 9, the day after Trump's election victory. Hedge funds and money managers also raised their net long position in COMEX gold contracts for the first time in nine weeks in the week to Jan. 10, US Commodity Futures Trading Commission (CFTC) data showed on Friday.
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