Investing.com - Gold prices were higher in North American trade on Thursday, touching the strongest level in around two weeks as investors feeling increasingly nervous over the future of Donald Trump's U.S. presidency sought safe havens for their money.
Comex gold futures added around $1.00, or about 0.1%, to $1,260.29 a troy ounce by 8:00AM ET (12:00GMT). Meanwhile, spot gold was at $1,260.51.
Prices of the yellow metal jumped to an overnight peak of $1,265.00, the most since May 1.
Gold notched a sixth-straight winning session on Wednesday as investors fretted over the latest news coming out of Washington.
Reuters reported earlier that former National Security Adviser Michael Flynn and others on Trump’s campaign team exchanged at least 18 undisclosed phone calls or emails with Russian contacts during the 2016 presidential race.
That was only the latest worry in a tumultuous week at the White House, which included allegations that the president tried to interfere with a federal investigation and shared classified information with Russia's foreign minister.
The Justice Department on Wednesday appointed former FBI director Robert Mueller as special counsel to take over the investigation of Russia's alleged interference in the U.S. presidential election.
The recent string of controversies intensified doubts that Trump would be able to follow through on his campaign promises for tax cuts, deregulation and fiscal stimulus.
The deepening political turmoil dampened demand for risk-sensitive assets, such as global equities, and sparked a rally in assets perceived as safe, such as the yen, bullion and U.S. Treasuries, which are often used as a hedge in times of political uncertainty.
The dollar wallowed near six-month lows against a basket of major currencies on Thursday, struggling to recover from its worst losses in almost a year against the yen and the euro as worries over the Trump presidency weigh.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up less than 0.2% at 97.52 in New York morning trade.
It slid to an overnight low of 97.28, levels last seen in the immediate aftermath of Trump's surprise victory in November.
Meanwhile, a recent run of disappointing U.S. economic data, including inflation, retail sales and housing starts has also weighed on the dollar, tempering expectations for higher interest rates.
Odds for a June rate hike dropped to around 60%, according to Investing.com’s Fed Rate Monitor Tool, down from more than 80% a week ago, while odds for a second rate hike by December fell to 30% from around 50% in the preceding week.
The Fed has signaled it intends to raise rates twice more this year, after a quarter-point hike in March.
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 declined 16.2 cents, or about 1%, to $16.74 a troy ounce, after hitting its highest since May 1 at $17.03 on Wednesday.
Elsewhere in metals trading, platinum shed 1.1% to $935.95, while palladium slumped 1.5% to $765.17 an ounce.
Copper futures sank 5.4 cents to $2.493 a pound.