Gold prices hit 1-month high

28/03/2017 05:24 AST

Gold rallied more than 1 percent on Monday after US President Donald Trump’s failure to push through a health care reform package on Friday raised questions about his ability to deliver promised tax cuts and spending plans.

That knocked the dollar to a four-month low versus a currency basket and drove a drop in stock markets, with European indices sliding nearly 1 percent in early trade and US stock index futures hitting six-week lows.

Spot gold was up 1.1 percent at $1,257.08 an ounce at 0930 GMT, having touched a one-month high of $1,259.14. US gold futures for April delivery were up $8.60 an ounce at $1,257.10.

“Trump’s spectacular failure to get his health bill through Congress raises concerns about his ability to achieve his goals on other policies,” Saxo Bank’s head of commodity research Ole Hansen said.

“With stocks, the dollar and bond yields lower and geopolitical risks on the rise, gold may stand out as the commodity of choice at such time.”

Gold had already rallied sharply from its March 15 low following a less hawkish policy statement than expected from the Federal Reserve, which dampened expectations for near-term increases in US interest rates.

The world’s largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, reported an outflow of 1.8 tons on Friday. US Commodity Futures Trading Commission (CFTC) data showed on Friday that hedge funds and money managers boosted their net long positions in COMEX gold in the week to March 21, after two weeks of cuts. China’s net gold imports via main conduit Hong Kong rose 50.8 percent month-on-month in February to 47.931 tons, data showed.

Arab News