Gold prices rebound in Asia after recent dips, geopolitics eyed
Gold prices rebounded mildly in Asia on Thursday as investors came in after a recent sharp dip following the French election results and as investors took positions on potential geopolitical risks on the Korean peninsula where the U.S. has moved to setup a sophisticated anti-missile system to deter North Korea from launching ballistic missiles.
Gold for June delivery on the Comex division of the New York Mercantile Exchange rose 0.28% to $1,276.33 a troy ounce. Silver futures gained 0.37% to $17.496 a troy ounce and copper dipped 0.58% to $2.587 a pound.
Overnight, gold prices traded slightly below breakeven on Wednesday, weighed by a shift in sentiment towards riskier assets, as investors digested bullish comments from U.S. Treasury Secretary Steven Mnuchin and awaited a tax reform update from President Donald Trump.
Treasury Secretary Steven Mnuchin confirmed Monday, that the tax reform plan would cut the business tax rate to 15 percent. Mnuchin’s comments came ahead of an eagerly awaited update from President Donald Trump on his tax reform plan.
Expectations of a bullish tax reform plan, underpinned a recovery in the dollar, which weighed on dollar denominated gold.
Gold is sensitive to moves in the dollar – A rise in the dollar makes dollar-denominated assets such as gold more expensive for holders of foreign currency and thus, decreases demand.
Gold prices have been under pressure since pro-EU candidate Emmanuel Macron won the first round of the French presidential election. Recent polls predict an easy victory for Emmanuel Macron in the runoff vote for the French presidency, scheduled for May 7.