Gold hit a five-month high of $1,295.42 yesterday as the dollar weakened with investors taking refuge in safe-haven assets in the wake of rising geopolitical tensions over North Korea.
“Gold will likely retain a measure of strength heading into the French elections in about one week’s time, while ongoing tensions in North Korea should also keep the markets rather nervous,” said INTL FCStone analyst Edward Meir.
The dollar dipped to a five-month low against the yen early yesterday. The bullish sentiment in gold was underscored by data showing speculators increased their net long positions for a fourth straight week to April 11.
New York-listed SPDR Gold Shares ETF, the world’s biggest gold-backed exchange-traded fund, said its holdings rose more than six tonnes on Thursday, the biggest one-day inflow in a month.
Uncertainties over US President Donald Trump’s policy on North Korea have been growing since the US Navy fired 59 Tomahawk missiles at a Syrian airfield on April 6. Adding to these concerns, the US military last week dropped the largest non-nuclear device it has ever used in combat on a network of caves and tunnels used by Islamic State in eastern Afghanistan.
“Gold is trading with an upward bias with the $1300 level just in sight. We expect any dips in prices to be eagerly sought by traders,” said Jeffrey Halley, a senior market analyst at Oanda.