Gold shines as investors opt for safe-haven assets

Gold shines as investors opt for safe-haven assets Government plans to establish 32 gold processing centres in small-scale mining areas around the country

Gold was on track for a second consecutive weekly gain on Friday as political uncertainty in the US and a suspected Islamist attack in Spain boosted bullion’s safe-haven appeal. Spain mounted a sweeping anti-terrorism operation on Friday after a suspected Islamist militant drove a van into crowds in Barcelona, killing 13 people in what police suspect was one of a planned wave of attacks.

Markets were also uncertain about US President Donald Trump’s ability to push ahead with policies after the disbandment of two high-profile business advisory councils over his remarks on violence in Virginia.

“There is clearly more for financial markets to be concerned about,” Danske Bank analyst Jens Pedersen said, referring to US political uncertainty and the attack in Spain. “That has led to a risk-off environment, and that’s supportive for gold.”

Spot gold rose by 0,6 percent to $1 295,28 an ounce by 9.35am GMT and is on course to extend last week’s gain of 2,5 percent.

US gold futures for December delivery were up 0,7 percent at $1 301. Investors ditched riskier assets while the dollar eased, further supporting gold.

“The discord coming out of Washington could prove supportive for gold as well, as this could pressure the dollar further, just as the Fed is casting fresh doubts about its (interest) rate timetable,” said INTL FCStone analyst Edward Meir.

Policy makers in Europe and the US expressed concerns about unwinding monetary stimulus too soon. Gold is sensitive to rising interest rates because they push up bond yields, increasing the opportunity cost of holding non-yielding bullion while tending to strengthen the dollar, in which gold is priced.

Spot gold faces resistance at $1 291 an ounce and could hover below this level or retrace towards support at $1 271 again, said Reuters technical analyst Wang Tao.

Among other precious metals, silver climbed 1 percent to $17,15 an ounce, having touched a two-month high of $17,25. Platinum was up 1,2 percent at $974,80, on track for a third straight week of gains.

Palladium touched a 16-year high of $932,50 before giving back some gains to trade 0,3 percent up at $929, on course for a weekly gain of about 4 percent. – Reuters.

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