Latest News

Irish News

Click Here to read Irish News

Forex News

Click Here to read Forex News

Market News

Click Here to read Market News

Irish News
/fxcentre/i-want-to/read-news
PRECIOUS-Gold jumps to 6-year peak on weaker dollar, U.S.-Iran friction
Published at 25/06/2019 at 08:54

* Gold heads for 6th straight gain, up nearly 10% this month

* Palladium hits three-month high

* Spot gold may test resistance at $1,439/oz - technicals

(Adds comments, updates prices)

By Brijesh Patel

June 25 (Reuters) - Gold prices climbed more than 1% on Tuesday to a six-year high, as the dollar slipped to multi-month lows on prospects of monetary easing by the Federal Reserve, while simmering U.S.-Iran tensions lifted appeal for the safe-haven metal.

Spot gold was up 0.9% at $1,431.93 per ounce, as of 0739 GMT, after hitting its highest since May 14, 2013 at $1,438.63.

It was headed for a sixth consecutive session of gains and has risen nearly 10% so far this month.

U.S. gold futures jumped 1.3% to $1,436.20 an ounce.

Bets for lower interest rates, weaker U.S. dollar and tensions in the Middle East are providing an ideal environment for gains in gold prices, said Michael McCarthy, chief market strategist, CMC Markets.

U.S. President Donald Trump targeted Iranian Supreme Leader Ayatollah Ali Khamenei and other top Iranian officials with sanctions on Monday to increase pressure on Iran after Tehran's downing of an unmanned American drone.

"The outlook for gold is very positive in the coming months, however, we would be concerned that this rally may have over extended itself," Mark O'Byrne, research director at Dublin-based gold dealer GoldCore, said in a note.

"It (gold) may be vulnerable to a correction in the short term, specifically in the next few days prior to month-end."

Meanwhile, the dollar index dipped to a three-month low on Tuesday, making bullion cheaper for investors holding other currencies.

Fed Chairman Jerome Powell and a few other central bank policymakers are due to speak later on Tuesday, and markets assume they will stick with the recent dovish message.

Investors looked to whether Trump and Chinese President Xi Jinping would at least call a truce in their trade war when they are expected to meet at the G20 summit in Osaka later this week.

"The main event this week will be the sidebar meeting between Trump and Xi, which could stop the current gold rally with a productive sit-down that ends up in a trade agreement," Alfonso Esparza, a senior market analyst at OANDA, said in a note.

Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, rose 0.37% on Monday, after posting their biggest percentage gain in nearly 11 years on Friday.

On the technical front, spot gold may test a resistance at $1,439 per ounce, a break above could lead to $1,461, according Reuters technical analyst Wang Tao.

Among other precious metals, silver was up 0.1% at $15.44 per ounce and platinum gained 0.3% to $812.53.

Palladium was steady at $1,534.40 an ounce after hitting its highest since March 27 at $1,545.87 earlier in the session.

(Reporting by Brijesh Patel in Bengaluru; Editing by Sherry Jacob-Phillips and Subhranshu Sahu)

((Brijesh.Patel1@thomsonreuters.com; Within U.S. +1 651 848 5832, Outside U.S. +91 8067493865; Reuters Messaging: Brijesh.Patel1.thomsonreuters.com@reuters.net))