Spot gold traded to a three-month high on Monday due to the weakening of the United States dollar against both the euro and yen as well as geo-political concerns, traders said.
At 12.30pm, gold was quoted at $408,50/oz up from Friday’s close of $407,58/oz. The euro was last quoted at $1,2424, from its previous close of $1,2412.
Earlier on Monday, the euro touched $1,2437, its best level since March 10.
“Gold is up today on a mixture of everything with the funds and Commodity Trading Advisors or CTAs getting involved. Commodities in general are also benefiting from the weaker US dollar. Base metals in general are very strong, which is moving silver higher and in turn gold,” a Switzerland-based trader said.
“The next major resistance level for gold is $410/oz and once through there, the bullion price could move toward $420/oz. Geo-political concerns are also supporting the gold price, in particular the talk of delaying the US election due to terror concerns,” he added.
The US government is considering postponing the November presidential election in event of terror attack.
Earlier on Monday, platinum touched a month-high of $828,50/oz due to the continued strength of the yen against the US dollar. The metal is also being supported by general strength in metals, short-covering and the continued strength of the South African rand.
The strong rand is expected to place South African platinum miners under further pressure.
At 12.30pm, platinum was quoted at $824/oz, up $10,50/oz from the metal’s previous close of $813,50/oz. The US dollar was last quoted at 107,67 yen, down from Friday’s close of 107,88 yen.
“The price of platinum moved up during Asian trading hours this morning and the metal could test $850/oz in the next few days,” said UK-based director for TheBullionDesk.com Ross Norman.
In mid-April, platinum touched a 24-year high of $944,50/oz and then declined from those highs on fears about the outlook for US interest rates and a possible hard landing for the Chinese economy.
Platinum is used mainly in auto catalysts and in the manufacture of jewellery.
At 12.30pm, palladium was quoted at $226,50/oz, up $3/oz from the previous close of $223,50/oz.
Any upside for palladium, used mainly in auto catalysts, is likely to be capped by the continued oversupply for the metal.
Palladium has attempted to push towards $230/oz, but is still attracting selling into price strength, London-based UBS analyst John Reade said. — I-Net Bridge