Investing.com - Gold futures soared to a two-week high on Wednesday, as investors poured back into the safe-haven trade, after U.S. political turmoil and a recent batch of downbeat economic data dampened investor appetite for riskier assets.
Gold for June delivery on the Comex division of the New York Mercantile Exchange gained $22.84 or 1.85%, to $1,259.24 a troy ounce by 13:40 EDT.
The U.S. political saga continued to dominate market moves for a second-straight day amid reports that President Donald Trump asked the then-FBI Director James Comey to shut down an investigation into the actions of former National Security Advisor Mike Flynn.
The latest political saga out of Washington weighed on the dollar, which underpinned a surge in commodities across the board.
The US Dollar Index Futures, which measures the greenback’s strength against a trade-weighted basket of six major currencies, printed fresh six-month lows and dropped to 97.43, down 0.63%
Dollar-denominated commodities such as gold are sensitive to moves in the dollar – A dip in the dollar makes gold cheaper for holders of foreign currency and thus, increases demand.
Elsewhere, gold bugs cheered a tick lower in expectations concerning a June rate hike as recent economic data fell short of expectations.
The Commerce Department said Tuesday, housing starts dropped 2.6% to a seasonally adjusted annual rate of 1.17 million units, the lowest level in five months, and below expectations for a 3.7% rise.
According to investing.com’s Fed rate monitor tool only 58% of traders expect the Federal Reserve to hike its benchmark rate in June, compared to nearly 70% of traders in the previous week.
Meanwhile, silver futures rose 1.12% to $16.935 a troy ounce while platinum added 0.10% to trade at $918.60,
Copper traded flat at $2.548 while natural gas fell by 1.46% to $3.184.
Natural Gas futures came under pressure at the start of the week amid expectations of a drop in demand, after the latest U.S. weather model predicted mild temperatures over the next two weeks.