Gold rose on Monday, buoyed by safe-haven demand due to uncertainty over U.S. policy ahead of President-elect Donald Trump’s inauguration and amid concerns over Britain’s exit from the European Union.
Spot gold had risen 0.5 percent to $1,203.15 per ounce by 0548 GMT.
U.S. gold futures were up 0.6 percent at $1,203.40 per ounce.
“Buying shows that people are looking ahead this week with Trump’s inauguration and discussions on Brexit. There is a lot of uncertainty moving forward,” said Brian Lan, managing director at Singapore-based gold dealer GoldSilver Central.
“On the physical side, people are expecting good demand from China ahead of the Chinese New Year,” Lan said. The Lunar New Year falls later this month
“We expect gold to retest $1,205-$1,207 again and breaching this might see $1,220 as the next level.”
Spot gold faces strong resistance at $1,205-$1,210 per ounce and it may hover below that or retrace towards support at $1,172, according to Reuters technical analyst Wang Tao.
All eyes will be on Trump’s inauguration on Friday for any clarity on his economic plans, with investors often turning to gold as a so-called safe-haven in times of economic uncertainty.
Trump’s campaign calls for tax cuts and more infrastructure spending have boosted U.S. shares and the dollar, as well as driving a selloff in Treasuries, but his protectionist statements and a flurry of off-the-cuff Tweets have kept many investors from adding to risky positions.
“This could be a slight technical recovery from the December lows amidst waiting for clues from Trump and Fed’s decisions on further rate hikes,” said V Hareesh, Research Head of Geofin Comtrade Ltd.
“On a broad basis, sentiment is on the downside due to rate hike possibilities by the Fed. We don’t expect a rally up to $1,400. This recovery might be capped around $1,300.”
Meanwhile, Prime Minister Theresa May on Tuesday will call on Britons to reject the acrimony of the Brexit referendum in a speech that some newspapers have billed as setting the stage for a “hard” exit from the EU. [nL5N1F505I]
Investors have been enticed into gold this month as questions over Federal Reserve policy and the Trump administration drive a bigger than usual January bounce in a beaten-down market. [nL5N1F24M2]
Hedge funds and money managers in the week to Jan. 10 raised their net long position in COMEX gold contracts for the first time in nine weeks. [nL1N1F31R8]
Spot silver rose 0.4 percent to $16.84 an ounce.
Platinum prices were firm at $983.10, while palladium fell 0.1 percent to $748.22.