Gold traded near a two-week high as the disarray engulfing Donald Trump’s White House boosted the commodity’s allure as a haven, with equities in retreat and investors scaling back the odds of the Federal Reserve tightening policy next month. Other precious metals fell.
Bullion for immediate delivery eased 0.3% to $1 257.65 an ounce by 9:53am in London after earlier touching $1 263.20, the highest since May 1, according to Bloomberg generic pricing. On Wednesday, the metal surged 2% to post the biggest gain since June 2016.
Gold is benefiting as Trump faces the biggest crisis of his presidency after a series of damaging revelations, including reports he pressed FBI director James Comey to drop a probe into former National Security adviser Michael Flynn. As the potential implications of the claims reverberated through Washington, equities sank and the dollar traded near the lowest since November. While the White House has denied Comey’s version, there’s concern the administration won’t now be able to implement its economic agenda.
“People are now worried that he may get impeached,” said Brian Lan, managing director of Singapore-based GoldSilver Central Pte, referring to Trump. “So safe-haven assets are now back in.”
Gold needs to clear the $1 270 level before it can go higher to possibly reach $1 300, but for now, prices are a “little overdone” and a small correction is expected, according to Lan. “It all depends on the news flow,” he said.
“The ongoing political uncertainty is likely to keep upward pressure on gold,” Australia & New Zealand Banking Group said, noting that expectations of a June hike had receded. “Uncertainty over the Trump administration’s ability to stay focused and effectively carry out its planned economic program rose sharply overnight, and this was reflected in a flight to safe-haven assets.”
In other precious metals:
Silver for immediate delivery dropped 0.9%, the biggest decline in more than a week, to $16.8214 an ounce after touching $17.0423 on Wednesday. Spot platinum dropped 0.9%, ending a run of six consecutive gains. Spot palladium fell for a fourth day, heading for the lowest close in a month at $778.92 an ounce.
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