Gold slips on stronger dollar; geopolitical risks support
By Arpan Varghese
BENGALURU (Reuters) – Gold slipped on Wednesday, pressured by gains in the dollar amid perception of a brief lull in tensions over North Korea, but prices of the yellow metal remained supported as safe-haven demand was buoyed by expectations that geopolitical risks could persist.
“The dollar strength is taking some shine off the yellow metal,” said Naeem Aslam, chief market analyst, Think Markets.
“The $1,300 mark for gold is a line in the sand.”
Spot gold was down 0.1 percent at $1,307.60 per ounce as of 0701 GMT. It hit an over nine-month peak on Tuesday at $1,325.94.
U.S. gold futures slipped 0.4 percent to $1,313.20.
The dollar rebounded from a 2-1/2-year low on Wednesday, and Asian stocks took cue from Wall Street’s stronger close, as concerns about North Korea’s firing of a missile over Japan ebbed.
North Korea said on Wednesday it had conducted a test of an intermediate-range ballistic missile (IRBM) to counter U.S. and South Korean military drills.
The United States will not allow North Korea’s lawlessness to continue and it is time for Pyongyang to recognise the “danger they are putting themselves in” as the world is united against them, U.S. Ambassador to the United Nations Nikki Haley said on Tuesday.
“A lot of people are still seeing gold as a safe haven because we have not heard much in terms of reactions of the different countries to North Korea’s action,” said Brian Lan, managing director at dealer GoldSilver Central in Singapore.
Geopolitical risks can boost demand for safe-haven assets such as gold, considered a good store of value during volatility in other markets.
“Do we think that the geopolitical issue will intensify? No, we don’t, but we cannot rule it out either,” said Dominic Schnider at UBS Wealth Management in Hong Kong.
“Looking at how things are spiralling, the risk is that these tensions linger on.”
Spot gold is expected to retest a resistance level at $1,326 per ounce, said Reuters technical analyst Wang Tao.
In other precious metals, silver fell 0.1 percent to $17.33 per ounce, trading below its more than two-month peak of $17.67 touched on Tuesday.
Platinum also eased by 0.1 percent to $991.15 per ounce. In the previous session, the metal hit its highest since early March at $1,006.30.
Palladium was mostly unchanged at $943.00 per ounce. It hit its highest in more than 16 years in the previous session at $949.10 an ounce.
(Reporting by Arpan Varghese in BENGALURU; Editing by Tom Hogue and Subhranshu Sahu)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)