Gold touches three-week peak as investors ditch equities on Trump worries

Gold touches three-week peak as investors ditch equities on Trump worries
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LONDON (March 22): Gold strengthened on Wednesday, with the price touching its highest in three weeks as the dollar languished near six-week lows and bond yields sank on uncertainty over the economic policies of US President Donald Trump.

Spot gold was up 0.1% at US$1,245.54 an ounce by 1205 GMT, having earlier climbed as high as US$1,248.47.

The lack of a concrete policy from the Trump administration is increasing gold's attraction as a safe-haven investment, analysts and traders said.

"It seems that equity investors decided to take some money off the table, perhaps getting slightly wary about the progress in President Trump’s legislative agenda," said INTL FCStone analyst Edward Meir.    

US gold futures firmed slightly to US$1,245.90.

The dollar index, which measures the greenback against a basket of currencies, was at 99.818, near the six-week low of 99.642 reached on Tuesday.

Gold was also supported by a further drop in US Treasury yields, with the 10-year benchmark yield dipping below 2.4% for the first time since March 1.

Gold has rallied nearly US$50 from last Wednesday's low and clocked its longest winning streak since early January after a less hawkish tone on interest rates in the US Federal Reserve's latest policy statement.

"The re-positioning of investors since the FOMC meeting continues unabated, with investors becoming less bearish as a result of the subdued outlook for rates in 2018," ANZ analysts said in a note.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.5% to 834.40 tonnes on Tuesday after three sessions of outflows.

In other precious metals, spot silver slipped by 0.2% to US$17.52 an ounce, having hit a more than two-week high of US$17.59 in the previous session.

Platinum gained 0.6% to US$970 and palladium eased by 0.3% to US$783.75. Palladium had peaked at US$792.90 on Tuesday, its highest in more than a month.