Gold prices trade higher after Trump decision to withdrawal from Iran nuclear deal
U.S. President Donald Trump announced that Washington will withdraw from a deal that eased economic sanctions on Iran in exchange for Tehran limiting its nuclear program.
The decision to leave the accord could raise risk aversion in the broader markets, helping gold, seen as a safe asset that holds its value in times of geopolitical turmoil. Still, gold has been under pressure over the last three weeks with the dollar having rallied around 4.5 percent. A strong dollar makes dollar-priced gold costlier for non-U.S. investors.
“A stronger dollar has created headwinds for gold but we don’t see the dollar going much higher on a medium term basis and in terms of geopolitics there are some factors to keep an eye on,” said Jens Pederson, senior analyst at Danske Bank.
Against a basket of rivals, the dollar surged to a 2018 high as expectations that other major central banks would follow the footsteps of the U.S. Federal Reserve in normalizing monetary policy have been dashed.
Gold in 2018 will deliver its strongest annual price performance in five years, GFMS analysts forecast on Tuesday, as political uncertainty drives investment in bars and bullion-backed investment funds.
In industry news, the World Gold Council, owner of the world’s largest gold-backed exchange traded fund (ETF), is launching a new fund with a cut-price management fee to fend off rivals with lower charges.
Spot gold may revisit its May 1 low of $1,301.51 per ounce as it twice failed to break resistance at $1,317, Reuters technical analyst Wang Tao said.
Silver was up 0.4 percent at $16.51 an ounce, while platinum was up 0.54 percent at $912.90, having hit its highest since April 25 in the last session. Palladium fell 0.2 percent to $969.70, after hitting its highest since April 27 on Monday.
Source: Reuters
