Gold steady on geopolitical worries amid firmer dollar

Gold prices held firm on Thursday after falling as much as one percent the previous day, with tensions surrounding North Korea and the upcoming French presidential election driving safe-haven demand amid a firmer dollar.

Spot gold was mostly unchanged at $1,278.64 per ounce at 0346 GMT. The metal fell 0.8 percent on Wednesday in its worst one-day drop in over a month.

“Sentiment overall is that everybody is looking for $1,300 at least by the end of the week. Sentiment around geopolitical issues is really playing on people’s minds,” said Spencer Campbell, general manager with Kaloti Precious Metals in Singapore.

“We are seeing a lot more physical purchasing, with shops seeing a 100-percent increase in buying from the retail sector,” said Campbell.

“This clearly shows the pull back is an opportunity (to buy gold before it climbs above $1,300).”

Analysts and traders said gold would be supported by simmering geopolitical tensions around North Korea and nervousness ahead of the first round of France’s presidential election.

“With this weekend’s French Presidential vote event risk, it is hard to see gold forming a meaningful correction to the downside before next week at the earliest,” said Jeffrey Halley, senior market analyst at OANDA.

“Safe-haven buying should continue to support any dips.”

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 1.39 percent on Wednesday, their biggest one-day gain since early September 2016. Holdings climbed nearly 12 tonnes from Tuesday to 860.76 tonnes.

Meanwhile, spot silver gained 0.2 percent to $18.11.

Platinum rose 0.3 percent to $965.29, while palladium was up 0.5 percent at $779.10.

Source: Reuters