Gold rose on Thursday as the US dollar backed away from 2018 highs after weaker-than-forecast US inflation data and as tensions between the United States and Iran also supported the precious metal. The dollar slipped from a 4-1/2-month peak after US data showed the Consumer Price Index rose 0.2 percent in April, less than the 0.3 percent increase that had been forecast. A weaker dollar makes dollar-priced gold cheaper for non-US investors.
Also helping gold, viewed as a safe-haven investment, was US President Donald Trump's move on Tuesday to withdraw from a nuclear accord with Iran, raising the risk of conflict in the Middle East. "We've seen a (dollar rally) in the last few weeks, but actually gold hasn't gone down as far as you might think, so political tensions are helping," said Macquarie commodities strategist Matthew Turner.
Turner said the dollar was the main driver for gold and he expects the precious metal to come under pressure in the near term, with the dollar extending its rally. Spot gold rose 0.6 percent at $1,320.53 per ounce by 1:34 p.m. EDT (1734 GMT). During the session it touched $1,322.76, a 10-day high. US gold futures for June delivery settled up $9.30, or 0.7 percent, at $1,322.30 per ounce.
Risk appetite among investors limited gold's gains. Global equities hit a three-week high as rising oil prices boosted energy companies, offsetting increased political uncertainty. "It appears as though the investment side of the equation has not attracted a lot of attention," said Rob Lutts, chief investment officer of Cabot Wealth Management
In other precious metals, silver gained 1.4 percent at $16.72 an ounce after earlier hitting a two-week high at $16.74. Platinum rose 1.7 percent at $925.40 per ounce, earlier hitting $926.20, a two-week high. Palladium rose 2.6 percent at $1,000.70 per ounce, earlier seeing $1,002.10, a 2-1/2-week high.
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