Gold gained on Thursday after the U.S. House of Representatives voted to impeach President Donald Trump, stoking political uncertainty in the world’s largest economy.
Spot gold was up 0.2 percent at $1,477.78 per ounce, as of 0443 GMT. U.S. gold futures were up 0.2 percent at $1,481.80 per ounce.
Trump became the third U.S. president to be impeached as the Democratic-led House formally charged him with abuse of power and obstruction of Congress in a historic step that will inflame partisan tensions across a deeply divided America.
Cautious sentiment supported bullion, often seen as an alternative investment during times of political and financial uncertainty.
“The impeachment is resulting in a slight increase of the uncertainties and we’re seeing gold inch higher on the back of that,” said ANZ analyst Daniel Hynes.
“This news is also offsetting headwinds such as strong equity markets, the (U.S.-China) trade deal and better economic data.”
Although the reaction to the impeachment was largely muted, Asian shares pulled back from a one-and-a-half year peak, while the U.S. dollar eased slightly against a basket of currencies.
If the U.S. Senate convicts, “which would be unexpected, then that throws next year’s election in a very uncertain place,” Ilya Spivak, a senior currency strategist at DailyFx said, adding that gold prices will then gain on risk aversion.
Two U.S. Federal Reserve policymakers on Wednesday said the U.S. economy is in good shape following three interest-rate cuts this year, reiterating the consensus at the Fed for keeping borrowing costs where they are for the time being.
Strong U.S. manufacturing output in November also cemented Fed’s view. Gold is highly sensitive to any reduction in interest rates, which decreases the opportunity cost of holding non-yielding bullion.
Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.3 percent to 883.29 tonnes on Wednesday.
Elsewhere, palladium edged up 0.2 percent to $1,927.08 per ounce. Prices of the auto catalyst metal had hit an all-time peak of $1,998.43 on Tuesday on a sustained supply crunch.
Silver rose 0.2 percent to $17.04 per ounce, while platinum dipped 0.1 percent to $934.36.