Gold prices climb as geopolitical worries spur safe-haven buying

Gold edged up on Tuesday as rising political tensions over North Korea and the Middle East buoyed safe-haven demand for the metal.

Spot gold was up 0.2 percent at $1,256.36 per ounce by 0307 GMT, while U.S. gold futures rose 0.3 percent to $1,257.90.

Heightened tensions in the Korean peninsula and Middle East following U.S. strikes on Syria, along with the upcoming French presidential election, have made investors nervous.

“Gold should retain a measure of support given the political tensions,” said INTL FCStone analyst Edward Meir.

British Prime Minister Theresa May spoke on Monday to U.S. President Donald Trump and agreed that “a window of opportunity” exists to persuade Russia to break ties with Syrian President Bashar al-Assad.

Meanwhile, the Federal Reserve plans to raise U.S. interestrates gradually so as to sustain healthy growth without letting the economy overheat, Fed Chair Janet Yellen said on Monday.

Rising interest rates lift the opportunity cost of holding non-yielding bullion.

“Rallies above $1,260 could be hard to sustain, as gold lacks momentum from a technical perspective,” said Jeffrey Halley, senior market analyst at OANDA.

“A break of $1,240 will prelude a deeper correction.”

Gold has been failing to break key chart resistance at its 200-day moving average, which sits around $1,256.82 on Tuesday.

Spot gold is still targeting $1,241 per ounce, as suggested by its wave pattern and a Fibonacci retracement analysis, said Reuters technical analyst Wang Tao.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.21 percent to 838.26 tonnes on Monday from 836.49 tonnes on Friday.

Spot silver edged up 0.1 percent to $17.93 an ounce.

In the previous session, it marked its lowest in over two weeks at $17.71.

Platinum inched up 0.2 percent to $937.60 an ounce, after hitting its weakest in over three weeks at $931.85 on Monday.

Palladium was down 0.1 percent at $787.25.

Source: Reuters