A saleswoman selects gold necklaces in a jewellery showroom in India
A saleswoman selects gold necklaces in a jewellery showroom in India. Gold prices have been on the rise on concerns of a slowdown in the global economy, and trade and regional tensions. Image Credit: Reuters

London: Gold rose above $1,400 (Dh5,138) on Monday, hovering near a six-year high touched in the previous session, driven by dovish signals from global central banks and increased tensions between the United States and Iran.

Spot gold was up 0.6 per cent at $1,406.83 per ounce as of 0959 GMT, heading for a fifth straight session of gains. Gold prices hit $1,410.78 on Friday, their highest since September 4, 2013.

US gold futures rose 0.7 per cent to $1,410.20 an ounce.

$1410.78

6-year price peak of gold reached on Friday’s trading

“The weakness of the US dollar, gold’s technical picture and interest from investors themselves have become self-sustaining factors, especially after the massive inflows into the gold exchange-traded funds (ETF),” Commerzbank analyst Eugen Weinberg said, adding that tensions between the United States and Iran also supported gold.

Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 4.57 per cent on Friday from a day earlier, in its biggest one-day percentage gain since September 2008.

The US Federal Reserve and the European Central Bank last week hinted that they were open to ease policies to counter a global economic slowdown, exacerbated by global trade tensions.

7.7%

spike in gold prices this month, with over $70 hike in last week

Helping gold’s appeal, the dollar fell to a three-month low against a basket of currencies on bets the US central bank would start lowering interest rates as early as next month.

Meanwhile, US President Donald Trump said on Sunday he was not seeking war with Tehran, but tensions remain high between the longtime foes, with Washington due to announce “significant” sanctions on Iran on Monday.

Gold prices have risen 7.7 per cent so far this month, and more than $70 just over the past one week.

Hedge funds and money managers boosted their bullish stance in COMEX gold in the week to June 18 and speculators switched to a net long in silver futures and options, the US Commodity Futures Trading Commission said on Friday.

$1406.83

price of spot gold per ounce during Monday’s trading

Gold holding above the psychologically important $1,400 level is a positive signal of consolidation after last week’s rally, said Carlo Alberto De Casa, chief analyst at ActivTrades.

“The gold rally pushed silver up too, but the scenario in this case is less strong, as prices keep bouncing on the resistance area at $15.5.” Silver edged 0.1 per cent higher to $15.37 per ounce and platinum was up 0.9 per cent at $813.82.

Palladium rose 1.1 per cent to $1,516.03 an ounce.

The market’s focus now shifts to whether Washington and Beijing can resolve their trade dispute at a summit in Japan this week of leaders from the Group of 20 leading world economies.