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Gold posts highest finish in 7 months as havens find support

Gold futures on Tuesday posted the highest close since early
November, with analysts pinning the gain in part on haven
investment demand sparked by Mideast tensions.

Gold for August delivery

GCQ7,
+0.84%

 rose by $14.80, or 1.2%, to settle at
$1,297.50 an ounce. Prices extended their streak of gains into
a third-consecutive session and finished at the highest for a
most-active contract since Nov. 4, according to FactSet data.

Traders already had been expected to favor safety plays in this
action-packed week, said Naeem Aslam, chief market analyst at
ThinkMarkets, in a note. There are three Thursday events
sparking worries: a European Central Bank announcement, the
U.K. general election and former Federal Bureau of
Investigation boss James Comey’s testimony before a Senate
panel. The panel is investigating Russian efforts to interfere
in last year’s presidential race.

See: What to watch when James Comey testifies to
the Senate on Thursday

But this week also has brought a rift between Qatar and other Mideast
nations,
helping to further boost gold’s appeal as a hedge
against uncertainty.

“The conflict between Saudi Arabia and Qatar has taken this
trade to another level altogether,” Aslam said. “Markets across
the Middle East have been rattled by this news and the shining
metal is in massive demand.”

Check out U.K. election—the worst, best and most likely
scenarios for stocks world-wide

Weakness in the U.S. dollar, with the ICE
U.S. Dollar Index

DXY,
-0.18%

 edging down by 0.3%, and some losses among U.S. equities, helped to
lift investment demand for gold as well.

“Every thing is going right for gold with a weaker U.S. dollar
against the Japanese yen, and Qatari risk also supporting
bulls,” said Chintan Karnani, chief market analyst at Insignia
Consultants.

Some traders are buying gold on the belief that after a
“probable interest-rate hike” at the Federal Reserve’s monetary
policy meeting next week, the central bank’s statement will
offer a “soft” tone, as far as interest-rate increases are
concerned for the rest of the year, he said.

“Fundamentals are positive for gold with a big jump in physical
gold demand in India and China in the month of May,” Karnani
said. “Personally, I will be looking for signs of correction on
Thursday” when the U.K. starts its election.

Among other metals, July silver

SIN7,
+0.39%

rose 12.9 cents, or 0.7%, to $17.71 an ounce, while
July copper

HGN7,
-0.35%

 ended at $2.547 a pound, down 1.1 cents, or
0.4%. July platinum

PLN7,
+0.30%

 added $5.70, or 0.6%, to $963.30 an ounce and
September palladium

PAU7,
+0.97%

 rose $6.55, or 0.8%, to $848.40 an ounce.

The SPDR Gold Trust

GLD,
+0.90%

 was up 1.2%, while the iShares Silver Trust

SLV, +0.48%

tacked on 0.7%. The VanEck Vectors Gold Miners exchange-traded
fund

GDX, +4.11%

 climbed by 4.3%.

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