Gold climbs to one-week high after Yellen, Draghi comments

Gold rose to its highest in over a week on Monday as the dollar hoarded losses after comments from key central bankers at an economic policy meeting in the United States boosted the Euro.

Spot gold rose 0.5 percent to $1,297.60 an ounce by 0651 GMT, after reaching its highest since Aug. 18 at $1,298.58 earlier. It gained nearly 0.4 percent in the previous session.

U.S. gold futures for December delivery were up 0.4 percent to $1,302.90 per ounce.

At the meeting in Jackson Hole on Friday, Yellen made no reference to U.S. monetary policy but instead focused on financial regulations, leading traders to expect a slowing in further interest rate hikes.

Later in the day, European Central Bank Chief Mario Draghi said the bank`s ultra-loose monetary policy was working and that the euro zone`s economic recovery has taken hold, but refrained from commenting on the single currency`s recent strength.

"The rhetoric surrounding Jackson Hole was in part an optimistic one, owing to the ECB president`s comment that `global recovery is firming up` while the euro area growth was `gaining ground`," OCBC analyst Barnabas Gan said.

"...Yellen and Draghi remained ambiguous over monetary policy strategies, thus giving market players the reason to lift gold prices on monetary policy uncertainty."

Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.

The euro on Monday surged to its highest in over 2-1/2 years against the dollar, with the greenback also pressured by concerns over the impact of Tropical Storm Harvey on the U.S. economy.

"Gold prices could breach $1,300 per ounce this week should safe haven demand stay supported on Trump`s threat to quit NAFTA amid North Korean tensions," Gan said.

U.S. President Donald Trump renewed his threat to scrap NAFTA and ripped on trading partners Canada and Mexico in a tweet on Sunday, days before a second round of negotiations on rewriting the 23-year-old agreement.

"Political uncertainty remains high and continues to provide a strong level of support to prices," ANZ analyst Daniel Hynes wrote in a note.

Speculators raised their net long position in COMEX gold for the sixth straight week in the week to Aug. 22.

Meanwhile, silver was up 0.5 percent to $17.15 an ounce, after earlier touching its best since Aug. 18 at $17.21.

Platinum rose 0.8 percent to $979.45 an ounce, while palladium inched 0.2 percent higher at $930.55.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)