LONDON: Gold was steady near a two-month high yesterday ahead of significant US economic data this week and looking set for a second straight quarterly gain after world political tensions bolstered demand for the metal.
Investors were awaiting US jobs data and the European Central Bank (ECB) meeting later this week for clues on future monetary stimulus strategy before placing any big bets.
The dollar remained under pressure awaiting this week’s busy calendar of US data, which includes the June non-farm payrolls report on Thursday, a day earlier than usual due to the July 4 US Independence Day holiday.
“After we had that dramatic increase in longs last week and as we move towards non-farms there might be a bit of cautionary reduction coming into the market and the risk is to the downside,” Saxo Bank senior manager Ole Hansen said.
Hedge funds and money managers sharply increased their bullish bets in gold futures and options to their highest since March in the week to June 24, data from the Commodity Futures Trading Commission showed on Friday.
Spot gold was unchanged at $1,314.71 an ounce by 1410 GMT, having hit a two-month high of $1,325.90 last week.
The metal has gained 2.4 percent in the second quarter of the year, after rising nearly 7 percent in the previous quarter.
US gold futures for August delivery were down 0.3 percent at $1,315.80 an ounce.
In wider markets, the dollar struggled to get off a one-month low against a basket of major currencies early yesterday, following its biggest weekly fall in over two months after a batch of disappointing US data.
Gold was also supported by escalating violence in Iraq and Ukrain-Russia tussle. “The geopolitical factor is one that it’s not easy to predict and that could keep gold above $1,300 just on its own,” Societe Generale analyst Robin Bhar said.
In times of political or financial trouble investors often turn to gold, which can be perceived as insurance against risk. Reuters
