Gold steadied on Monday, January 30 steadied as political uncertainty triggered by U.S. President Donald Trump’s move to ban people from seven Muslim-majority countries boosted prices.
Spot gold was a touch lower at 1210 GMT, down 0.1 percent. That compared with Friday’s 2-1/2-week low of $1,180.65. U.S. gold futures gained 0.1 percent to $1,189.8.
Traders reported subdued activity because of the Lunar New Year holiday in many Asian countries and some nervousness before the Federal Reserve’s two-day meeting on monetary policy starting on Tuesday.
“Gold’s future direction will depend on the dollar, U.S. monetary policy and long-term interest rates,” said Commerzbank analyst Carsten Fritsch,
Trump’s administration tempered a key element of his immigration ban, but the move reinforces growing worries about investing in the United States, analysts said.
“We maintain a cautious view on gold, taking into consideration the expectation of an improving growth outlook, rising interest rates and a strengthening dollar,” Julius Baer analysts said in a note.
“That said, we acknowledge the upside risks related to recent actions taken by President Trump, such as the immigration ban. Should he become the feared ‘unguided missile’, uncertainties would increase, fostering safe-haven demand and pushing gold prices significantly higher.”
Technically, gold is struggling to stay above the 21-day moving average around $1,191 an ounce. A sustained break above is expected to meet resistance at $1,200 and $1,220, near the January highs. Support is at $1,176, the 55-day moving average.
A negative for gold could be speculators cutting their net long positions in the futures market, after two straight weeks of increases, according to data from the CFTC, which also showed they raised their silver holdings to the highest since early November.
Spot silver fell 0.1 percent to $17.09 per ounce, platinum slid 0.6 percent to $977.2 and palladium ceded one percent to $728.9 per ounce.
