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Comex Gold Up On Safe-Haven Interest; SPDR Holdings On 2 Months High

20 Jan 2020 9:02 pm
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Mumbai (Commodities Control) – Gold hit a more than one-week high on Monday as investors hedged against lingering tensions in the Middle East and an impeachment trial in Washington.

Spot gold was up 0.3% at $1,560.38 per ounce at 1340 GMT, after touching its highest since Jan. 10 at $1,562.51 earlier in the session. U.S. gold futures were little changed at $1,560.50. Silver rose 0.3% to $18.05.

"Investors are flocking towards gold in spite of a spike in equity markets mostly because of long-term uncertainties like political insecurity, probable equity market volatility in future, weak earnings expectations and ultra-low interest rates," Commerzbank analyst Eugen Weinberg said.

Investors are pouring money into gold exchange traded funds (ETF) and central banks are buying the metal at record rates, Weinberg added.

Holdings of the world's largest gold-backed ETF, SPDR Gold Trust, rose 2.2% to 898.82 tonnes on Friday, the highest since Nov. 11. Investors kept a close eye on developments in the Middle East, after Iran-aligned Houthis attacked a military training camp in Yemen on Saturday.

Also on the radar was the shutdown of oil facilities in Libya amid a military blockade, and heightened tensions between the United States and Iran.

In Washington, President Donald Trump will offer his first comprehensive defence on Monday before his impeachment trial in the Senate.

World stocks, meanwhile, held near record highs, while the dollar rose as a host of positive economic data pointed towards a strengthening economy. Trading volumes were low with U.S. markets closed for a holiday.

"The rebound of gold despite the strength of the greenback is confirming investors' strong appetite for bullion," Carlo Alberto De Casa, chief analyst at ActivTrades, said in a note.

Focus will also turn to the U.S. Federal Reserve as it meets for its first policy meeting of the year later this month, where it is widely expected to keep interest rates unchanged.

The Fed cut interest rates three times last year before deciding to stand pat. Lower interest rates encourage the buying of non-interest-paying bullion.

(Commodities Control Bureau)

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