Gold prices extended gains for a fourth day on Tuesday as political troubles and weaker-than-expected housing data in the United States dented the dollar while a more upbeat scenario in Europe lifted the euro. “The dollar is weak today, which has helped precious metals across the board,” said Carsten Menke, analyst at Julius Baer in Zurich. He attributed the move in the greenback to a combination of events in the United States and Europe.
Spot gold was up 0.6 percent at $1,237.85 an ounce by 3:30 p.m. EDT (1930 GMT), after rising to $1,239.10, the highest since May 4.U.S. gold futures settled up 0.5 percent at $1,236.40. The dollar index slipped to the weakest in more than six months after two U.S. officials said President Donald Trump disclosed highly classified information to Russia’s foreign minister about a planned Islamic State operation.
Investors regarded Trump’s difficulties as another obstacle to planned U.S. tax cuts and infrastructure spending that had boosted the dollar since the November election. Gold is used as an alternative investment during times of political and financial uncertainty. Also pressuring the dollar, the Commerce Department said housing starts dropped to the lowest level in five months.
“I think (the dollar) is the key catalyst,” Bill O’Neill, co-founder of LOGIC Advisors, said about the session’s main source of support for bullion prices. At the same time, markets were cheered by the outlook for Europe after German Chancellor Angela Merkel and new French President Emmanuel Macron agreed to draw up a roadmap to deepen European Union integration.
Investors may become more cautious, however, due to recent global developments including a North Korean missile test and the “ransomware” cyber attack, which could lift gold prices over the next two weeks, said Mark To, head of research at Hong Kong’s Wing Fung Financial Group. Among other precious metals, silver rose 1.3 percent at $16.81 an ounce after tapping $16.86, the highest since May 3. Platinum rose 1 percent to $936.80, with a session high at $942, a two-week high.
A bullish signal for platinum has appeared in charts, said Stéphanie Aymes, head of technical analysis at Societe Generale. “Short term, platinum looks headed for $953, the trend line resistance and the 61.8 percent retracement of the last bout of down move, and $991,” she said in a note, adding that further targets would be $1,046 and $1,080. Producers, fabricators and traders have gathered for Platinum Week in London. Palladium edged down 0.6 percent to $791.75 an ounce, paring losses after dropping to $784.97, the lowest since April 20.