Investing.com - Gold prices gained in Asia on Thursday as risk-on sentiment remained in place on prospects for President Donald Trump to push new economic policies amid a political backlash over his firing for FBI Directors James Comey.
Gold for June delivery on the Comex division of the New York Mercantile Exchange rose 0.14% to $1,220.65 a troy ounce. Copper futures on the Comex gained 0.28% to $2.502 a pound.
Overnight, gold prices traded higher on Wednesday, as investors’ appetite for risk eased, after Trump unexpectedly sacked Comey while geopolitical jitters over North Korea returned as gold futures bounced off an eight-week low.
The New York Times reported that days before he was fired, Comey asked the Justice Department for additional resources for the bureau's investigation into Russia's interference in the presidential election.
Meanwhile, geopolitical jitters underpinned the move higher in gold prices, after North Korean ambassador to the UK said the country will proceed with its sixth nuclear test.
Despite the bounce in gold futures, overall sentiment remained fairly negative as it is widely expected that the Federal Reserve will hike interest rates in June.
Earlier this week, several Fed officials signalled that the U.S. central bank would continue on its stated interest rate path of three total rate hikes for 2017.
Kaplan said that three total rate hikes in 2017, is the “baseline scenario” but insisted that the Federal Reserve would continue to monitor changes in economic activity, which could pave the way for a more hawkish or dovish approach to future rate hikes.
According to investing.com’s Fed rate monitor tool, nearly 80% of traders expect the Federal Reserve to hike interest rates in June, compared to 63% in the previous week.
Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.