Investing.com - Gold prices gained in European trade on Wednesday, touching the highest level in two weeks as traders kept an eye on fresh political developments in the U.S. after President Donald Trump allegedly asked the FBI to end a probe into his former security adviser.
Comex gold futures rose around $7.00, or about 0.6%, to $1,243.61 a troy ounce by 3:00AM ET (07:00GMT). Meanwhile, spot gold was at $1,243.79. Prices of the yellow metal jumped to an overnight peak of $1,245.00, the most since May 3.
Gold notched a fifth-straight winning session on Tuesday as the dollar sank to a six-month low amid signs of slowing economic activity in the U.S.
Safe-haven demand was boosted after media reports said President Trump asked then-FBI Director James Comey to end a probe into Trump's former national security advisor, Michael Flynn.
The report raised questions over whether obstruction of justice charges could be laid against Trump, adding to concerns that he will be unable to successfully push through his economic stimulus program in the face of mounting controversies.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, weakened for a sixth straight day, falling around 0.2% to 97.86 in London morning trade. It slid to an overnight low of 97.76, a level not seen since November 9.
Meanwhile, a string of weaker than expected U.S. economic reports in recent days saw investors temper expectations for more rate hikes by the Federal Reserve.
Odds for a June rate hike dropped to around 64%, according to Investing.com’s Fed Rate Monitor Tool, down from more than 80% a week ago.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
Also on the Comex, silver futures gained 13.5 cents, or about 0.8%, to $16.88 a troy ounce.
Elsewhere in metals trading, platinum tacked on 0.5% to $941.95, while palladium held steady at $792.02 an ounce.
Copper futures dipped 0.2 cents to $2.549 a pound.