SINGAPORE. — Gold retained gains yesterday from a two-day rally, paring earlier losses as investors sought safety in the metal amid escalating tensions in the Korean peninsula and the Middle East, and worries over the Chinese economy. Traders, however, said gold’s safe-haven rally was not as strong as they had expected, given the geopolitical uncertainties and a softer dollar.
Spot gold was little changed at $1 078,20 an ounce by 6.12am, after earlier slipping 0,3 percent. Gold has gained 1,6 percent in the last two sessions, after touching a four-week high of $1 083,30 on Monday.
“It is supposed to be a risk-off trade but gold is actually struggling at the moment,” said a trader of precious metals in Hong Kong.
“It should have reacted more aggressively.” Gold prices could retreat as the metal has failed to hold above Monday’s $1 083-level, he added.
Bullion is often seen as an alternative investment during times of geopolitical and financial uncertainty, although safe-haven rallies tend to be short-lived. — Reuters.