Investing.com - Gold rose in Asia on Friday as markets stood on edge for a hung parliament after the U.K. election, plunging efforts to hold talks later this month on an exit from the European Union into potential chaos.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange rose 0.09% to $1,280.63 a troy ounce.
Overnight, gold prices fell on Thursday, as testimony from former FBI Director James Comey to the Senate Committee was less controversial than many had feared, easing investor concerns about a sharp rise in U.S. political turmoil which dampened demand for safe havens.
Investors were relived as former FBI Director James Comey’s public testimony to the Senate Committee offered little to spark further political turmoil in Washington, after he confirmed that President Donald Trump was not directly under investigation at the time he was fired.
Comey’s testimony overshadowed economic data, showing U.S. initial jobless claims fell by less than expected.
The U.S. Department of Labor reported that initial jobless claims decreased by 10,000 to 245,000 in the week ended June 3, below forecasts of a 15,000 decline.
Meanwhile in Europe, the European Central Bank (ECB) lowered Eurozone inflation expectations for the next two years, and said policymakers had not discussed tapering its massive bond buying program.
At a press conference after the ECB issued its decision to keep interest unchanged, ECB President Mario Draghi said interest rates were likely to remain at current levels for “an extended period of time."
The dovish comments from Mr Draghi weighed on the euro, lifting the dollar higher, which dampened demand for the precious metal.
Dollar-denominated commodities such as gold are sensitive to moves in the dollar – A rise in the dollar makes gold more expensive for holders of foreign currency and thus, reduces demand.