Singapore - Gold’s getting a lift from the turmoil in the West Wing. Bullion advanced for a fifth straight day as investors cut back on risk, with President Donald Trump’s administration embroiled in controversy after controversy and the dollar sinking to the lowest since November.
Bullion for immediate delivery climbed as much as 0.6% to $1 245.07 an ounce, the highest since May 3, and was at $1 243.31 by 12:25 in Singapore, according to Bloomberg generic pricing.
The winning run is the longest such stretch in a month, and takes gains this year to 8.4%.
Gold has rebounded following Trump’s firing of FBI Director James Comey a week ago, as well as reports he shared intelligence with Russian officials. In the latest twist, Trump is said to have asked Comey in February to drop an investigation into a former national security adviser, raising questions he may have obstructed justice.
The administration’s problems are seen as taking its focus away from policies to aid growth, hurting the U.S. currency.
"The rise in gold is largely a dollar play, with the dollar weakening because of Trump," said Barnabas Gan, an economist at Oversea-Chinese Banking, who also flagged overseas tensions. "There’s still more downside risk to gold in the long run, but in the short-term, given what the North Koreans are doing and what Trump is doing, the dollar is inherently weak."
The concerns surrounding the White House may slow economic-policy decisions, according to Westpac Banking, which recommends investors short the dollar. "Regardless of the ultimate conclusion of the political storm over Trump’s actions on Russia and the security services, it will at the very least linger as a distraction that makes it more difficult for the White House to pass pro-growth policies," said Sean Callow, a senior currency strategist.
Bullion has advanced in 2017 - posting a run of four monthly gains through April - even as the Federal Reserve tightens monetary policy, with a rate rise in March and more increases likely to follow. Higher rates tend to curb the appeal of non-interest-bearing assets like gold.
While this year is a "pretty hazy year for bullion, the path of least resistance is on the bearish side," said Singapore-based Gan, highlighting the Fed’s tightening cycle.
"If we divorce away all the uncertainty, the rate-hike story should at least bring gold prices to $1 100."
In China:
Bullion of 99.99% purity advanced 0.4% to 277.80 yuan a gram ($1 255 an ounce) on the Shanghai Gold Exchange. On the Shanghai Futures Exchange, gold for December delivery added 0.4% to 281.05 yuan a gram, while silver rose 0.2% to 4 120 yuan a kilogram.
In other precious metals:
Spot silver rose as much as 0.5% to $16.9431 an ounce, the highest level since May 2. Palladium was flat at $795.88 an ounce, while platinum was also little changed. NOTE: Palladium Price May exceed platinum in near term: Analysts NOTE: Amplats sees more platinum closures if prices low, rand gains.