April 3, 2017 / 7:09 PM / in 4 months

PRECIOUS-Gold rises on political uncertainty, shrugs off dollar gains

4 Min Read

    * Speculators raise net long positions in gold
    * Non-farm payrolls in focus this week

 (New throughout, adds comments, updates prices, milestones,
adds NEW YORK dateline)
    By Devika  Krishna Kumar and Zandi Shabalala
    NEW YORK/LONDON, April 3 (Reuters) - Gold rose on Monday on
geopolitical worries, but was trading in a tight range in the
absence of any fresh clues on U.S. monetary policy and as the
market looked to economic data later in the week for more
direction.
    Supporting gold was geopolitical tension sparked by U.S.
President Donald Trump who on Sunday held out the possibility of
using trade as a lever to secure Chinese cooperation against
North Korea.             
    Global equity markets eased on Monday as investors assessed
how Trump's protectionist stance on trade will play out during
meetings with Chinese President Xi Jinping slated for Thursday
and Friday.            
    Spot gold        was 0.3 percent higher at $1,252.66 per
ounce by 2:15 p.m. EDT (1815 GMT), trading in a range between
$1,244.05 and $1,253.52.
    "While the European elections, Brexit negotiations and
Trump's foreign policies could reignite safe-haven interest,
gold is not without hurdles," Standard Chartered said in a note.
    "We believe the fragile physical market and Fed rate hikes
will create a softer footing for gold prices. We maintain our
view that Q2 and Q3-2017 are likely to mark the strongest
quarters for gold prices this year."
     Gold is often seen as an alternative investment during
times of geopolitical and financial uncertainty.
    Bullion largely shrugged off a firmer dollar       , which
hit a two-week high against a basket of currencies before easing
to trade up 0.2 percent.       
    The dollar was up after U.S. construction spending and
manufacturing data on Monday were positive overall, affirming
the economy's steady improvement.             
    "Gold is holding well in spite of being torn between buyers
and sellers now as interest rate curve flattening in the
U.S. indicates possibly less inflation," said George Gero,
managing director at RBC Wealth Management.
    New York Fed President William Dudley, an influential
monetary policymaker, did not comment on interest rates in his
prepared remarks on Monday.              
    Ole Hansen, the head of commodity strategy at Saxo Bank said
the focus has now turned to U.S. payrolls data on Friday which
could provide more clues on the direction of interest rates.
    Spot gold notched a quarterly gain of about 8.4 percent on
Friday, marking its best quarter in a year, mostly driven by
uncertainties around Trump's policies and elections in Europe.
    Hedge funds and money managers raised their net long
position in COMEX gold for the second straight week in the week
to March 28, and boosted it slightly in silver, U.S. Commodity
Futures Trading Commission data showed on Friday.             
    In other precious metals, spot silver        edged down 0.3
percent to $18.17 per ounce but held near one-month highs.
    Platinum        rose about 1 percent to $953.65, after
recording its best quarter in a year. Palladium        was up
0.9 percent at $802.20 an ounce and is up about 17 percent so
far this year.
    "We think that both the gold and silver complexes will make
fresh highs this month ahead of the French elections, but likely
fade in their immediate aftermath," said INTL FCStone analyst
Edward Meir.

 (Additional reporting by Nallur Sethuraman and Arpan Varghese
in Bengaluru; Editing by David Evans and Andrea Ricci)
  

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