Gold Near 4-week High as Political Uncertainty Weighs on Dollar
BENGALURU: Gold prices touched their highest in four weeks on Monday, supported by political uncertainty in the United States that pushed the dollar to its lowest in over a year.
The dollar struggled near a 13-month low against a basket of major currencies as US political woes dampened hopes for quick passage of Trump’s stimulus and tax reform agendas.
A weaker greenback makes dollar-denominated gold less expensive for holders of other currencies, while the metal is also used as an alternative investment during times of political and financial uncertainty.
“I think people are getting more nervous and careful about what is going to happen (in terms of the controversies surrounding the administration of US President Donald Trump),” said Yuichi Ikemizu, Tokyo branch manager at ICBC Standard Bank.
“The market is expected to be quiet heading into the summer holidays in Asia, but if it moves at all, it’ll move to the upside rather than the downside.”
Spot gold was nearly flat at $1,254.31 per ounce at 0346 GMT. It earlier hit a 4-week high of $1,257.18 an ounce, having risen 2.1 per cent last week.