Gold rose for a fifth day on Wednesday as political turmoil and weak economic data in the United States reduced expectations of aggressive interest rate rises this year, pushed down US bond yields and drove the dollar to its lowest in six months.

Lower yields reduce the opportunity cost of holding non-yielding gold, while a weaker dollar makes bullion cheaper for non-US investors. Higher interest rates would push yields up and likely boost the dollar. Spot gold was up 0.7 per cent at $1,245.46 an ounce at 1132GMT, after earlier touching $1,248.70 (Dh4,586.48), its highest since May 3. US gold futures were 0.8 per cent higher at $1,245.80 an ounce.

"Downward movement in yields and the dollar have given support to gold," ABN Amro analyst Georgette Boele said. "And on top of this you get political uncertainty which is denting the dollar." Investors are questioning whether Trump can push through tax cuts and deregulation and fuelled demand for safe-haven assets including gold.

On the technical side, gold tested resistance at its 200-day moving average and Fibonacci retracement, both at around $1,245.

Silver was 0.4 per cent up at $16.88 an ounce. Platinum was 0.1 per cent higher at $938.25 and palladium was down 0.6 per cent at $789.13.

Source: Khaleej Times