Global gold prices hit five-month peak on weaker dollar, geopolitical tensions

The initial target for gold is around the US$1,307 level, but there needs to be a considerable worsening in the situation to push on past that mark, Halley said.

Gold jumped almost 2 per cent to a fresh five-month high on Tuesday (April 11) as investors sought assets seen as havens from risk amid mounting political and security concerns over North Korea, the Middle East and the looming French election.

The June gold contract was up $19.50 at US$1,273.40 an ounce and May copper contracts slipped two cents at US$2.58 a pound. Visit MarketWatch.com for more information on this news.

Uncertainty about the result of the upcoming French presidential election and possible USA military strikes against Syria and North Korea also boosted demand for safe-haven assets among jittery investors.

The U.S. dollar took a heavy hit after Trump told the Wall Street Journal the dollar "is getting too strong" and that he would prefer the Federal Reserve to keep interest rates low.

The gold price also managed to cross its 200-day moving average, a notable resistance point.

In currencies, the Canadian dollar held steady at 75.01 cents United States, a day before the Bank of Canada is set to make its latest interest rate announcement.

Gold's safe-haven appeal has been bolstered by mounting geopolitical tensions, with a US official telling Reuters on Saturday that a US Navy strike group will be moving towards the western Pacific Ocean near the Korean peninsula as a show of force.

Trump said he launched the missile strike because of evidence Syria was behind a chemical attack on civilians, and the United States has accused Russian Federation of trying to cover up for its ally by spreading disinformation.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund (ETF), rose 0.50 per cent to 842.41 tonnes on Tuesday.

Silver was slightly higher, gaining 0.05%, to change hands for $18.54 per ounce at the same time.

However, looking ahead, the prospects for gold and silver demand appear challenging, analysts said. Meanwhile the dollar index on monday rose to 101.340, more than a three week high. It hit its strongest since November 10 at $1,279.80 earlier, extending the previous session's near 2 percent gains.

The continuing situation in North Korea and any further escalation in tension is also likely to push gold bullion higher, as well as increase the potential for US attacks on Syrian targets.

Platinum is used in catalysts in diesel-powered vehicles, which are becoming out of favour in Europe.

  • Leroy Wright