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PRECIOUS-Gold gains amid concerns over trade war, Italy elections

Published 05/03/2018, 07:05 pm
© Reuters.  PRECIOUS-Gold gains amid concerns over trade war, Italy elections
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* Spot gold may rise to $1,332/oz - technicals

* Concerns persist over impact of Italy poll outcome on EU (Updates prices)

By Eileen Soreng

March 5 (Reuters) - Gold prices rose on Monday as investorsopted for the safe-haven asset amid fears of a global trade warand uncertainty surrounding the outcome of elections in Italy,which could spell new concerns for the euro zone.

Spot gold XAU= rose 0.4 percent to $1,326.76 per ounce at0756 GMT. Earlier in the session, it hit $1,327.86, the highestsince Feb. 27.

U.S. gold futures GCcv1 for April delivery rose 0.4percent to $1,328.20 per ounce.

The dollar fell for a fourth straight session to tradearound 105.37 yen JPY= , but was slightly above Friday's low of105.23, a level not seen since November 2016.

The U.S. currency slipped from its six-week high that ittouched on March 1, after U.S. President Donald Trump announcedplans to levy hefty tariffs on aluminium and steel importsigniting fears of retaliation from its trade partners. USD/ escalation of trade wars will significantly dent theU.S. dollar appeal, weigh negatively on U.S. assets such as bondand equities and make gold the go-to hedge against rising U.S.fiscal and political vulnerabilities," Stephen Innes, APACtrading head at OANDA, said in a note.

A weaker dollar supports gold, making it cheaper for holdersof other currencies.

Asian investors dumped shares and drove to the safety of theyen and gold amid fears of a global trade war and worries ofpolitical uncertainty in Italy, risks that cloud the outlook forworld growth. MKTS/GLOB USD/

"I think gold prices are up partly because of theuncertainty over the impact of the Italian election on the eurozone," said Ji Ming, chief analyst, Shandong Gold Group.

Italian voters delivered a hung parliament on Sunday and

if early projections are confirmed, none of Italy's three maingroups will be able to rule alone and there is little prospectof a return to mainstream, moderate government, giving theEuropean Union a new headache to deal with. appetite for a safe-haven asset such as gold risesduring times of geopolitical and financial uncertainty.

Spot gold could rise to $1,332 per ounce, as it has piercedabove a resistance at $1,325, according to Reuters technicalanalyst Wang Tao. other precious metals, silver XAG= rose 0.4 percent to$16.55 per ounce.

Platinum XPT= inched up 0.1 percent to $963.24 per ounce,while palladium XPD= gained 0.4 percent to $966.40.

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