Markets

No Reprieve For Dollar As Trump Troubles Mount

No Reprieve For Dollar As Trump Troubles Mount

USA gold futures were up 0.3% at $1,233.60 an ounce.

Spot gold was flat at $1,260.61 per ounce by 0345 GMT, after earlier touching its strongest since May 1 at $1,263.02.

Gold has risen after Trump's firing of Federal Bureau of Investigation director James Comey a week ago, as well as reports he shared intelligence with Russian Federation. The memo raises questions about whether Trump tried to interfere with a federal investigation.

In the wider markets, the dollar stood near six-month lows against a basket of major currencies as the United States political crisis appeared to deepen, and likely to delay any efforts by Trump to carry out his economic stimulus plans.

Risk aversion sentiment due to recent global developments including the North Korean missile test, the massive "ransomware" cyber attack and controversies surrounding U.S. President Donald Trump could lift gold prices over the next two weeks, Wing Fung's To added.

"An inherently weaker dollar was seen because of the Trump rhetoric", said analyst Barnabas Gan at OCBC.

Last month, the US bombing in Syria and the tension with North Korea led investors to think about a safe haven for their money. The White House came out and denied that such information was shared.

Lower yields reduce the opportunity cost of holding non-yielding gold, while a weaker dollar makes bullion cheaper for non-U.S. investors. The dollar has continued to fall on the back of a more bearish outlook on the USA economy, with the dollar index down 0.4%, its lowest since early November.




Expectations of a USA rate increase in June fell to 74% compared to 84% last week, according to the CME Fedwatch.

Spot gold faces a resistance at $1,245 per ounce and may temporarily hover below this level or retrace to a support at $1,237.26 before retesting this barrier, according to Reuters technical analyst Wang Tao.

Overnight, gold prices traded higher on Monday as weaker-than-expected US manufacturing data weighed on the dollar, which underpinned an uptick in commodity prices, while geopolitical concerns over North Korea resurfaced.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.5 percent.

Among other precious metals, silver slipped 0.6 per cent to US$16.75 an ounce, platinum was down 0.5 per cent at US$936.90 an ounce, while palladium shed 0.4 per cent to US$778.40.

The precious metal was trading at $1,258.50 an ounce as of 11:25 a.m. ET, a $22.10, or 1.79%, jump on the day.

USA gold futures settled up 0.2 per cent at $US1,230.


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