The prices of gold on Tuesday (January 31, 2017) have increased after U.S President Donald Trump’s 90-day ban for nationals from seven Muslim dominated countries and an executive order halting the entire U.S. refugee programme.
Gold is seen as a safe haven by many investors when there are uncertainties in the economy. Investors are currently avoiding risky assets and pulling the majority of their resources into gold.
Spot gold rose 0.4 percent to $1,200.00 per ounce by 0307 GMT, while U.S. gold futures edged up 0.5 percent to $1,199.6.
However, according to Reuters spot gold may edge up to $1,205 per ounce, as it has pierced resistance at $1,197, according to Reuters.
The dollar index, which measures the greenback against a basket of currencies, was down 0.1 percent at 100.34.
Meanwhile, traders are waiting for the outcome of the U.S. Federal Reserve’s two-day meeting on monetary policy. The meeting starts on Tuesday, January 31, 2017, and ends on Wednesday, February 1, 2017. This will give traders a cue on the U.S interest rate hikes.
The U.S Federal Reserve raised interest rates in December and has indicated a possible rate increase for three times in 2017.
Higher rates could mean a higher U.S. currency, which makes dollar-denominated gold more expensive for holders of other currencies, potentially dampening demand.
Asian shares were on the defensive on Tuesday as stringent curbs on travel to the United States ordered by President Donald Trump brought home to investors that he is serious about putting his radical campaign pledges into action.
In other precious metals, spot silver was up 0.2 percent, at $17.14 per ounce, while platinum edged up by 0.5 percent, to $990.30.
Palladium rose 0.7 percent, to $745.40 per ounce.
Trump’s executive order halted the entire U.S. refugee programme and also instituted a 90-day travel ban for nationals from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen.
The executive order also applies to those who hold dual nationality with one of the listed countries.
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