Quantcast

PRECIOUS-Gold extends rally to 6-yr peak on weaker dollar, U.S.-Iran spat


Shutterstock photo


* Gold at six-year high, gains for 6th straight session

* Dollar dips to three-month low

* Palladium touches three-month high of $1,548.03/oz (Adds comments, details, updates prices)

By Karthika Suresh Namboothiri

June 25 (Reuters) - Gold prices surged to a five-year highon Tuesday, extending gains for a sixth straight session, on theback of expectations of monetary easing by the U.S. FederalReserve and a subdued dollar.

Brewing tensions between the United States and Iran helpedprop up the price of gold, which is often picked as a hedgeagainst risk during political and economic uncertainties.

Spot gold XAU= rose nearly 1% to $1,432.42 per ounce as of10:03 a.m. EDT(1403 GMT). Prices had touched $1,438.63 in thesession, a level last seen in May 2013.

U.S. gold futures GCcv1 gained 1.3% to $1,436.00 perounce.

"Once these uptrends start, they don't come to an endovernight. It feeds on itself, and that means you could have anew trading range," said George Gero, managing director at RBCWealth Management, who now sees gold trading between $1,375 and$1,450 in the short term.

"People have been buying what they feel could be anadditional haven on more upcoming volatility caused by globaleconomic pullback, the tinder box of the Middle East with Iran,and the G20, which may not bring the (trade) deal with Chinathat everybody is expecting."

Equities traded lower due to Iran tensions and tradeworries, while demand for the dollar dipped to three-month lowsagainst major currencies on expectations the Federal Reservewould cut interest rates this year. MKTS/GLOBUSD/

Lower interest rates reduce the opportunity cost of holdingnon-yielding bullion and weigh on the dollar, and bullion hasgained nearly $100 in value since the Fed's statement last weekthat hinted at monetary easing.

U.S. President Donald Trump imposed sanctions on Iran'sSupreme Leader Ayatollah Ali Khamenei and other top officials onMonday, prompting Tehran to call it an end of diplomacy, liftingdemand for safe-haven gold. urn:newsml:reuters.com:*:nL8N23W0BP

Investors also watched for further cues on tradenegotiations between Washington and China, with Trump expectingto meet one-on-one with at least eight world leaders at the G20summit in Japan, including China's President Xi Jinping andRussian President Vladimir Putin. urn:newsml:reuters.com:*:nW1N22K02E

Indicating investor interest in gold, holdings of SPDR GoldTrust GLD , the world's largest gold-backed exchange-tradedfund, rose 0.37% on Monday, after posting their biggestpercentage gain in nearly 11 years on Friday. GOL/ETF

Other precious metals also gained, with platinum XPT= UP1.2% at $819.53 per ounce, while silver XAG= inched marginallyhigher to $15.43.

Palladium XPD= rose 0.4% to $1,541.78 an ounce afterhitting its highest since March 27 at $1,548.03 earlier in thesession.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Gold price in multiple currencies   https://tmsnrt.rs/2FIFb8b
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Karthika Suresh Namboothiri in Bengaluru; editingby Jonathan Oatis) ((karthikasuresh.namboothiri@thomsonreuters.com; +91 80 67490997 (If within U.S. call 651-848-5832); Reuters Messaging:karthikasuresh.namboothiri.thomsonreuters.com@reuters.net))






This article appears in: Stocks , World Markets , Politics
Referenced Symbols: GLD ,



More from Reuters

Subscribe







See Reuters News













Research Brokers before you trade

Want to trade FX?