BENGALURU, India: Gold hit a five-month high on Monday as the dollar weakened with investors taking refuge in safe-haven assets in the wake of rising geopolitical tensions over North Korea.
Spot gold was up 0.5 percent at $1,291 per ounce as of 0239 GMT, after hitting its highest since early November at $1,295.42. Last week, the metal rose 2.5 percent in its biggest weekly gain since June last year.
US gold futures were up 0.4 percent at $1,293.30 on Monday. North Korea on Sunday made what was believed to be a failed missile test launch, increasing geopolitical risks.
“Gold will likely retain a measure of strength heading into the French elections in about one week’s time, while ongoing tensions in North Korea should also keep the markets rather nervous,” said INTL FCStone analyst Edward Meir.
The dollar dipped to a five-month low against the yen early on Monday. The bullish sentiment in gold was underscored by data showing speculators increased their net long positions for a fourth straight week to April 11. New York-listed SPDR Gold Shares ETF, the world’s biggest gold-backed exchange-traded fund, said its holdings rose more than six tons on Thursday, the biggest one-day inflow in a month.
“Gold is trading with an upward bias with the $1,300 level just in sight… We expect any dips in prices to be eagerly sought by traders,” said Jeffrey Halley, a senior market analyst at OANDA.
Spot gold is expected to rise to $1,303 per ounce as it has broken above a resistance at $1,282, according to Reuters technical analyst Wang Tao.