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Gold Prices Hover Near 1-Week Highs in Cautious Trade

Gold prices supported by fresh U.S. political turmoil

Investing.com - Gold prices were hovering near one-week highs on Wednesday, as investors remained cautious after the sudden firing of U.S. Secretary of State Rex Tillerson.

Comex gold futures were little changed at $1,326.1 a troy ounce by 03:00 a.m. ET (07:00 GMT).

Markets were jittery after U.S. President Donald Trump on Tuesday fired Secretary of State Tillerson, considered more moderate in his administration. Tillerson will be replaced by CIA Director Mike Pompeo.

Investors also remained cautious after Trump announced plans to impose tariffs on up to $60 billion of Chinese imports, specifically targeting the technology and telecommunications sectors.

The dollar had already come under pressure after data on Thursday showed that U.S. consumer prices slowed last month, confirming that an anticipated pickup in inflation will probably be only gradual and easing concerns over a more aggressive interest rate policy by the Federal Reserve.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 89.64, the lowest since March 8.

Gold is sensitive to moves in both U.S. rates and the dollar. A weaker dollar makes gold less expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion.

Elsewhere on the Comex, silver futures slipped 0.16% to $16.60 a troy ounce.

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