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6 months ago
PRECIOUS-Gold hovers near 3-month highs; political uncertainty provides support
February 9, 2017 / 3:06 AM / 6 months ago

PRECIOUS-Gold hovers near 3-month highs; political uncertainty provides support

    * Spot gold may edge up to $1,249 - technicals
    * SPDR Gold holdings rise for 6th straight session
    * Spot gold hit 3-mth high of $1,244.67 in prev session
    * Silver, platinum off 3-month highs hit in prior session

 (Updates prices, adds comment)
    By Sethuraman N R
    Feb 9 (Reuters) - Gold held near 3-month highs on Thursday
as political risks from elections in Europe and worries over
U.S. President Donald Trump's policies buoyed safe haven demand
for the bullion.
    Spot gold        dipped 0.1 percent to $1,240 per ounce at
0708 GMT. On Wednesday, the metal touched its highest since Nov.
11 at $1,244.67.
    U.S. gold futures         rose 0.2 percent to $1,241.30 an
ounce.
    "Gold prices will be a little bit rangebound with some
upside bias for the next few weeks or so," said OCBC analyst
Barnabas Gan."
    "The risk factors have not really changed so far - we're
talking about Donald Trump, we're talking about the political
situation in Europe and because of all these factors, we do
expect market watchers to stay cautious into the months ahead to
gauge how the global economy is going to perform."
    Spot gold may edge up to $1,249 per ounce, as it has cleared
a resistance at $1,237, according to Reuters technical analyst
Wang Tao.             
    Investors are concerned about the strong showing in the
French presidential race of far-right candidate Marine Le Pen,
who has promised to take France out of the euro zone and to hold
a referendum on European Union membership.
    Controversy over U.S. President Donald Trump's temporary
travel ban on people from seven Muslim-majority countries has
recently boosted gold as a safe-haven asset.
    "Geo-political risks continue to underpin gold in the face
of the prospect of higher U.S. interest rates this year," said
Jeffrey Halley, senior market analyst at OANDA.
    "Increasing hostilities in the Ukraine, Greek bailouts,
French elections, Iran-U.S. sabre-rattling have all combined to
see investors flee to safe havens, of which gold is the main
beneficiary."
    The Fed raised rates for only the second time since the
financial crisis in December, and most Fed policymakers agree
that three more rate hikes this year would be appropriate.
            
    Investors' bullish stance on gold is underpinned by an
increase in net longs by speculators and a rise in holdings of
SPDR Gold Trust      , the world's largest gold-backed
exchange-traded fund. 
    SPDR holdings rose 0.68 percent to 832.58 tonnes on
Wednesday from Tuesday, rising for a sixth straight session.
         
    "The (gold) rally appears intact, but we think a near-term
bout of profit-taking may materialize at any time, especially if
there is a slowdown in ETF accumulation demand or reduced long
participation on the Comex," HSBC analyst James Steel said.
    Spot silver        fell 0.3 percent to $17.72 an ounce after
hitting its best since Nov. 11 at $17.86 in the previous
session.
    Platinum        edged up 0.2 percent at $1,014.40, after
touching its best since Nov. 9 at $1,019.20 on Wednesday.
    Palladium        rose 0.4 percent at $771.

 (Reporting By Nallur Sethuraman and Arpan Varghese in
Bengaluru; Editing by Richard Pullin and Biju Dwarakanath)
  

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