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Gold prices buoyed by global political tensions

Friday,   10-Aug-2018   09:17 AM (IST)

Gold prices held broadly steady in Asia on Friday after dipping the session before, drawing little support from global political tensions and turbulence in currency markets. Spot gold was flat at $1,212.12 an ounce at 0321 GMT, having lost 0.1 percent on Thursday. U.S. gold futures were steady at around $1,219.6 an ounce. The U.S. dollar, in which gold is priced, was down about 0.2 percent at 110.90 yen. The greenback, however, hovered just short of a 13-month high against a basket of peers as European currencies such as the pound and euro continued to lose traction. Meanwhile, fresh U.S. sanctions against Moscow drove down Russia’s rouble to a near two-year low, while the Turkish lira plumbed a record low in the wake of a diplomatic rift with the United States. Gold prices, which can gain during uncertainty, have largely failed to benefit from rising geopolitical tensions this year, as investors have chosen the safety of the dollar over the precious metal. Also adding pressure on gold were expectations for higher interest rates in the United States, where the Federal Reserve is expected to raise benchmark lending rates for the third time this year next month. The U.S. economy is performing “very well” with continued growth clearing the way for one or two more interest rate hikes in 2018, Chicago Federal Reserve Bank President Charles Evans said on Thursday in an interview in which he dismissed earlier worries about weak inflation. Higher U.S. rates tend to boost the dollar and Treasury yields, adding pressure on greenback-denominated, non-yielding bullion. In other metals, silver edged up 0.1 percent to $15.42 an ounce. Platinum was up 0.3 percent at $833.10, while palladium was 0.4 percent lower at 903.75.