Gold prices on Wednesday added to recent gains, trading at levels last seen in early November, as geopolitical tensions persist.
June gold rose $2, or 0.2%, to $1,276.20 an ounce, after bullion settled at a five-month high in the previous session. Prices also closed above the metal’s 200-day moving average of $1,260.49, according to FactSet data, pointing to an updraft developing in the precious commodity, according to technical analysts.
“Ongoing geopolitical tensions across the globe and heightened political risk in Europe have limited appetite for riskier assets this week, with global stocks now on the back foot,” said Lukman Otunuga, research analyst at FXTM, in a Wednesday research note.
A spate of geopolitical worries from tensions in Syria, after a U.S. airstrike in retaliation for an apparent chemical attack last week that strained relations with Russia, to mounting fears over North Korea, are unnerving investors, fueling demand for haven assets.
That political dynamic has put modest pressure on stocks, weighing on the S&P 500 index and the Dow Jones Industrial Average while underpinning havens gold and government bonds. The yield on the 10-year Treasury note traded below 2.30% Wednesday morning.
“With the overall trading mood subdued and participants adopting a cautious stance in this tense environment, Wall Street could struggle to venture higher this week,” said Otunuga.
The dollar, which tends to influence commodities pegged against the currency, was trading modestly lower, with the ICE U.S. Dollar Index at 100.63.
“This yellow metal is firmly bullish on the daily charts, and further upside may be expected as anxiety accelerates the flight to safety,” Otunuga said.
Still, the global economy appears strong, tempering the market’s unease somewhat, with the head of the International Monetary Fund, Christine Lagarde, pointing to improving global growth on Wednesday.
For now, gold’s sister metal also gained. May silver climbed 5.6 cents, or 0.3%, to $18.31 an ounce.