Gold steadied on Wednesday after hitting a five-month peak as the dollar reversed losses and political tensions simmered, leaving investor interest in safe havens like the precious metal largely intact.
Tarnishing an otherwise brightening outlook for global growth, tensions continued over the Korean peninsula and the Middle East, while worries about the upcoming French presidential election persisted.
"Gold finally came up to the $1,275 area we looked for as bullish technicals, political worries ... (added to) benign interest rates, Fed caution in raising rates and other world tensions especially Middle East and North Korea,".
"Gold finally came up to the $1,275 area we looked for as bullish technicals, political worries ... (added to) benign interest rates, Fed caution in raising rates and other world tensions especially Middle East and North Korea,".
Spot gold XAU= was mostly unchanged at $1,274.8 per ounce by 2:33 p.m. EDT (1833 GMT). It hit its strongest since Nov. 10 at $1,279.80 earlier, extending the previous session's near 2 percent gains.
U.S. gold futures GCcv1 rose 0.3 percent to settle at $1,278.1.
"We see short term downside for gold at $1276/oz with our 3/6/12-month price targets $1200/1200/1250/oz," Goldman Sachs (NYSE:GS) said in a note.
"Although it is possible that further unwinding of the Trump related equity trades or escalation in heightened geopolitical tensions pushes gold even higher in the next several weeks, we think that over the next three months improvement in U.S. hard growth data and subsequent increase in real rates would bring gold prices down."
Gold tends to gain when rate hike expectations recede because lower rates reduce the opportunity cost of holding non-yielding bullion.
The dollar .DXY was flat versus a currency basket after falling on Tuesday, though a general risk-off mood that has prompted investors to sell the greenback prevailed. FRX/
Chinese President Xi Jinping on Wednesday stressed the need for a peaceful solution for the Korean peninsula on a call with U.S President Donald Trump. Tuesday North Korea warned of a nuclear attack on the United States at any sign of American aggression, as a U.S. Navy strike group steamed towards the western Pacific. Vladimir Putin said trust had eroded between the United States and Russia, as Moscow delivered an unusually hostile reception to U.S. Secretary of State Rex Tillerson in a face-off over Syria. France's presidential race, centrist Emmanuel Macron and far-right leader Marine Le Pen clung on as frontrunners, but a far-left veteran has surged into the top four, pushing some pollsters to calculate the most extreme run-off scenarios. of SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, rose 0.50 percent to 842.41 tonnes on Tuesday. The ETF has seen about six tonnes of inflows this week.
"We see short term downside for gold at $1276/oz with our 3/6/12-month price targets $1200/1200/1250/oz," Goldman Sachs (NYSE:GS) said in a note.
"Although it is possible that further unwinding of the Trump related equity trades or escalation in heightened geopolitical tensions pushes gold even higher in the next several weeks, we think that over the next three months improvement in U.S. hard growth data and subsequent increase in real rates would bring gold prices down."
Gold tends to gain when rate hike expectations recede because lower rates reduce the opportunity cost of holding non-yielding bullion.
The dollar .DXY was flat versus a currency basket after falling on Tuesday, though a general risk-off mood that has prompted investors to sell the greenback prevailed. FRX/
Chinese President Xi Jinping on Wednesday stressed the need for a peaceful solution for the Korean peninsula on a call with U.S President Donald Trump. Tuesday North Korea warned of a nuclear attack on the United States at any sign of American aggression, as a U.S. Navy strike group steamed towards the western Pacific. Vladimir Putin said trust had eroded between the United States and Russia, as Moscow delivered an unusually hostile reception to U.S. Secretary of State Rex Tillerson in a face-off over Syria. France's presidential race, centrist Emmanuel Macron and far-right leader Marine Le Pen clung on as frontrunners, but a far-left veteran has surged into the top four, pushing some pollsters to calculate the most extreme run-off scenarios. of SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, rose 0.50 percent to 842.41 tonnes on Tuesday. The ETF has seen about six tonnes of inflows this week.
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