Investing.com - Gold prices traded higher on Monday, as investors continued to back the precious metal amid geopolitical concerns while downbeat economic data lifted sentiment.
Gold for June delivery on the Comex division of the New York Mercantile Exchange added $1.50, or 0.12%, to $1,290 a troy ounce by 13:40 EDT.
Fresh off the back of its best week since June, Gold futures made a bright start to the week, notching a five month high earlier during the session, as investors continued to pour into safe-haven assets such as gold amid rising geopolitical concerns.
Geopolitical tensions over North Korea escalated, after North Korea attempted to fire a ballistic missile on Sunday but it blew up almost immediately. North Korea continued to conduct missile tests despite renewed efforts by China to persuade North Korea to change course.
U.S. Vice President Mike Pence responded to North Korea’s failed missile attempt Monday, warning that “the era of strategic patience” with North Korea “is over”.
Meanwhile, weaker than expected economic data briefly weighed on the dollar, after New York area manufacturing slowed by more than expected in April.
The Empire State manufacturing survey fell to a reading of 5.2 April, well below consensus expectations for a reading of 15.
Gold prices pulled back from a five month high later during session, after the dollar bounced off session lows.
Dollar-denominated gold is sensitive to moves in the dollar – A rise in the dollar makes dollar-denominated assets such as gold cheaper for holders of foreign currency and thus, increases demand.
The strong rally in gold prices during recent trading sessions came against expectations that the yellow metal was set for period of consolidation.
“The rise in gold prices is expected to be short-lived … and our panel largely sees gold prices falling from the current high, though divergent views persist. For Q4, the maximum forecast is for gold to average USD 1,325 per troy ounce while the minimum forecast is for USD 1,070 per troy ounce". FocusEconomic Consensus noted in a report in April.
Silver futures were flat at $18.510, a troy ounce while copper gained 1.07% to $2.598.
Platinum added 1.46% to $997.70 while Natural Gas dipped by 1.21% to $3.188.