By Apeksha Nair
Sept 13 (Reuters) – Gold held steady on Wednesday amid firmer equities and a softer dollar, with safe-haven demand for the metal supported after U.S. President Donald Trump urged tougher measures against North Korea.
Spot gold was unchanged at $1,331.47 an ounce by 0719 GMT.
Asian stocks were slightly lower after earlier marking a near 10-year top, following record highs on Wall Street.
“You look at the Asian equity markets, it’s looking for a new high. That tells you something. People want to take risk,” said Dominic Schnider at UBS Wealth Management in Hong Kong.
“I think that clearly plays into the story that the underlying macro story is solid and this risk overlay starts to disappear and markets refocus on what’s driving long term returns.”
U.S. President Donald Trump said on Tuesday that U.N.
sanctions on North Korea agreed this week were a small step and nothing compared to what would have to happen to deal with the country’s nuclear programme.
“It seems to me that these concerns are starting to fade.
Some people expect a little harsher sanctions so it’s an indication that military confrontation, against these risks, are subsiding to some degree,” Schnider said.
Gold is used as an alternative investment during times of political and financial uncertainty.
“Futures are up mainly just on safe-haven buying. People probably see this as a fairly cheap level to purchase gold as a hedge against any future issues coming out of the Korean peninsula,” a Sydney-based trader said.
Meanwhile, the dollar index, which measures the greenback against a basket of currencies, slipped 0.1 percent to 91.758, but managed to remain above its 2-1/2-year low hit last week.
“We think the dollar has weakened beyond what it needs to at least in the short-term and we still look for one rate hike in December,” UBS’s Schnider said.
A stronger greenback makes bullion more expensive for holders of other currencies, while higher interest rates lead to higher bond yields and dampen demand for non-yielding gold.
Spot gold looks neutral in a range of $1,321-$1,335 per ounce, said Reuters technical analyst Wang Tao.
“We are neutral on gold here and would like to wait for some of the churn in the currency markets before advocating a more explicit position,” INTL FCStone analyst Edward Meir said in a note.
Holdings of SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, rose 0.35 percent to 838.64 tonnes on Tuesday.
Among other precious metals, silver was down 0.2 percent at $17.87 an ounce, while platinum and palladium were both 0.1 percent lower at $985.50 and $953.50 an ounce.