Gold holds steady near recent highs

Bengaluru — Gold steadied off the previous day’s three-month peak on Wednesday as the dollar firmed, but prices held at elevated levels after this week’s drop in stock markets pointed to a weaker appetite for risk.

Spot gold was little changed at $1,230.32/oz at 11.32am GMT. US gold futures were down 0.3% at $1,233.20/oz.

On Tuesday, the precious metal touched its highest since July 17 at $1,239.68.

“Gold is focusing on the risk aversion creeping into the market, especially reflected in the weakness seen in global stock markets,” said Saxo Bank analyst Ole Hansen.

“The $1,240 [level] from a technical perspective is quite significant, and if it breaks above $1,240, the next level could be $1,260.”

Gold prices have gained more than 6% after falling to $1,159.96/oz in mid-August, their lowest since January 2017.

“After reaching a three-month high yesterday [Tuesday], gold is taking a breath, but the price remains above the threshold of $1,230, confirming its strength,” ActivTrades chief analyst Carlo Alberto De Casa said in a note.

“The environment remains positive for bullion, with growing investor interest for the precious metal [among those] betting on further corrections of stock market increases.”

World stocks steadied after falling for five consecutive days, pressured by earnings disappointment, concerns over Italy’s budget and worries that world growth is losing steam.

Markets are awaiting British Prime Minister Theresa May’s address to Conservative Party legislators later on Wednesday, as she seeks to calm growing tensions over her Brexit strategy.