Gold rises to two-week high as Donald Trump's troubles multiply

Spot gold was up 0.2 percent at,263.06 an ounce at 1102 GMT while US gold futures for June delivery were up.20 an ounce at,262.90

Spot gold was up 0.2 percent at,263.06 an ounce at 1102 GMT while US gold futures for June delivery were up.20 an ounce at,262.90

Comex gold futures added around $1.00, or about 0.1%, to $1,260.29 a troy ounce by 8:00AM ET (12:00GMT).

Spot gold was down 0.1 percent at $1,258.75 an ounce at 1320 GMT, having touched its highest since May 1 at $1,265.04.

Gold prices were higher in North American trade on Thursday, touching the strongest level in around two weeks as investors feeling increasingly nervous over the future of Donald Trump's USA presidency sought safe havens for their money. Gold has risen for five days straight. The Comey memo, first reported by the New York Times, caused alarm on Capitol Hill and raised questions about whether Trump tried to interfere with a federal investigation.

According to a market analyst of Hantec Markets Richard Perry, the dollar is "coming under increasing corrective pressure amidst data disappointment and more concern over Trump", the ICE dollar index losses 0.4% to 98.515, hitting its lowest level ever since November 10 of a year ago.

This inverse relationship between the US dollar and gold has held throughout history and was one of the major reasons for the most recent gold rally from 2000 to 2010.

"Continued unpredictability of the Trump administration, North Korea flexing its muscles again and weaker data coming from the US has helped bring back some interest", said Ole Hansen, head of commodities strategy at Saxo Bank. The White House denied the report.

That political disorder reached a new head as several events coincided to increase uncertainty among investors and, therefore, sent them toward gold as a safe-haven asset. We have also seen the market expectations of a rate hike in the USA in June begin to evaporate, amidst the heat of the political debate in the U.S. and this is again a dollar negative and we are seeing some roll back in the pricing in of the rate hike over the last couple of days.

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The precious metal is sensitive to moves in US rates, which lift the opportunity cost of holding non-yielding assets such as bullion.

Meanwhile, data from the U.S. Department of Labor, also released on Thursday, said initial jobless claims fell by 4,000 to 232,000 in the week ending May 13.

Gold prices pared gains as the USA dollar came off its lows and US 10-year Treasury yields bounced up from a 1-1/2-week low.

Asian stocks fell on Thursday with MSCI's broadest index of Asia-Pacific shares outside Japan dropping 0.6 per cent.

Among other precious metals, silver was down 0.4 percent at $16.79 an ounce, while platinum was down 0.8 percent at $934.80 an ounce and palladium was 2.1 percent lower at $765.43.

United States gold futures were almost flat at US$1,258.40 an ounce.

Spot gold may retrace moderately to a support at $1,252 per ounce, before retesting a resistance at $1,264, according to Reuters technical analyst Wang Tao.

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