Gold got an early-week bounce as geopolitics had the dollar sputtering Monday and left haven assets, including the precious metal, in higher demand.
North Korean sabre-rattling, China’s trimmed GDP estimate, U.S. President Donald Trump accusing Obama of pre-election wiretapping and the persistence of troubled French presidential candidate Francois Fillon fueling political uncertainty there all combined to largely push down the greenback and bring at least a short-term bid for gold, even as the prospect for higher U.S. interest rates kept the metal’s gains in check.
“We were expecting a bad start for gold this week after the bullish market sentiment in the U.S., the strong dollar and significantly increased expectations over the Fed rate hike. Instead gold has today clocked an initial gain due to geopolitical tensions further to North Korea’s ballistic missile launches,” said Mihir Kapadia, CEO of Sun Global Investments. “Such geopolitical mayhem expands the interest for safe-haven assets such as gold.“
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