Gold on track for biggest gain in five weeks

Fri May 19, 2017 12:27pm GMT
 

By Zandi Shabalala

LONDON (Reuters) - Gold rose on Friday and was on track for its best week in five as the dollar softened on political turbulence in the United States, boosting bullion's safe-haven appeal.

Spot gold was up 0.5 percent at $1,253.31 per ounce, as of 1151 GMT, putting it up 1.9 percent for the week. U.S. gold futures slipped 0.1 percent to $1,251.60 an ounce.

"Political risk is back on again after market participants became overly complacent following the outcome of the French elections," Commerzbank analyst Carsten Fritsch said.

"Risk sentiment took a major hit," he said.

Gold is often seen as an alternative investment during times of geopolitical and financial uncertainty, gaining alongside bond yields and the yen while stocks usually take a hit.

U.S. President Donald Trump last week fired FBI Director James Comey, triggering a political firestorm which culminated on Wednesday in the Justice Department's appointment of a special counsel to probe possible ties between Russia and Trump's 2016 presidential campaign.

The dollar index, which measures the greenback against a basket of six major currencies, was headed for its worst week in nine months while world stocks were set for the first weekly fall in five. [USD/][MKTS/GLOB]

New applications for U.S. jobless benefits unexpectedly fell last week and the number of Americans on unemployment rolls tumbled to a 28-1/2-year low, pointing to rapidly shrinking labour market slack.   Continued...

1 kg. gold bars are seen on a production line in Ahlatci Metal Refinery in the central Anatolian city of Corum, Turkey, May 11, 2017.   REUTERS/Umit Bektas
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UK £ USD =1.2940
Euro USD =1.1205
Rand USD =0.0773