Investing.com – Gold prices rose for the second day in a row buoyed by continued dollar weakness while ongoing political tensions between the U.S. and North Korea lifted sentiment.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange rose $8.71, or 0.68%, to $1,293.72. a troy ounce.
Gold’s bullish start to the week continued as safe-haven demand remained elevated amid ongoing geopolitical uncertainty on the Korean Peninsula while dollar weakness supported an uptick in demand for the precious metal.
“Gold has benefited from the U.S. dollar’s fall, along with geopolitical tensions. For the remainder of this year, we believe that gold is likely to mirror the dollar and ‘follow fear,’ wrote Scott Wren, senior global equity strategist at Wells Fargo (NYSE:WFC) Investment Institute, in a Monday research note.
Gains in gold, however, were capped after the Catalan government Carles Puigdemont said he wanted to delay any formal declaration of independence, easing geopolitical uncertainty in the region.
"We propose to suspend the effect of the independence declaration... in order to work towards putting into practice the result of the referendum... Today, we are making a gesture of responsibility in favour of dialogue," Catalan president Carles Puigdemont said in speech to the Spanish parliament.
Dollar-denominated assets 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.
Despite the uptick in gold recent data points toward possible weakness as net bullish bets on gold fell to 203,900, according to a report from the Commodity Futures Trading Commission (CFTC) on Friday.
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