May 30, 2017 / 7:52 AM / 6 months ago

PRECIOUS-Gold hits 1-mth high as geopolitical worries boost safe haven demand

    * Political uncertainty in Europe stokes safe-haven buying
    * Spot gold, silver touch one-month peaks
    * Spot gold may rise to $1,276 per ounce -technicals

 (Updates prices)
    By Nithin ThomasPrasad
    May 30 (Reuters) - Gold edged up to touch a one-month high
on Tuesday, with investors turning to the safe-haven asset as
geopolitical tensions sapped their appetite for risk.
    Spot gold        had risen 0.1 percent to $1,267.30 per
ounce by 0737 GMT. It earlier touched its strongest since May 1
at $1,270.47.
    U.S. gold futures         dipped 0.1 percent to $1,266.90 an
ounce.
    Risk surrounding the closeness of Britain's upcoming
elections, the prospect of early elections in Italy and worries
over Greek debt were supporting gold, said Jeffrey Halley, a
senior market analyst at OANDA.
    "The picture will get more muddy as the week goes on as we
have a lot of data from around the world coming in," he said.
    British Prime Minister Theresa May's lead over the
opposition Labour Party dropped to 6 percentage points in a poll
published on Tuesday, with the election due next week.
            
    In Italy, former prime minister Matteo Renzi suggested on
Sunday that the country's next election be held at the same time
as Germany's amid mounting speculations that Italians could head
to the polls in the autumn. Germany will vote on Sept. 24, while
elections are due in Italy by May 2018.             
    Meanwhile, euro zone finance ministers failed to agree with
the International Monetary Fund last week on Greek debt relief
as well as failing to release new loans to Athens.             
    China, Hong Kong and Taiwan markets are closed for holidays
on Tuesday.
    "The ongoing political uncertainty in the market is really
driving safe-haven buying at the moment," said ANZ analyst
Daniel Hynes. 
    "Weaker equity markets certainly have played their part, but
support from that has been sporadic and we're continuously
seeing a strong level of safe-haven demand being the primary
driver still."
    Gold is used as an alternative investment during times of
political and financial uncertainty.
    Spot gold may rise to $1,276 per ounce, as suggested by its
wave pattern and a Fibonacci ratio analysis, according to
Reuters technical analyst Wang Tao.             
    In wider markets, the geopolitical fears over Europe weighed
on Asian stocks and kept the euro under pressure.
                         
    Among other precious metals, silver        marked its
highest level since April 27 at $17.47 an ounce. It was last
flat at $17.37. 
    Palladium        was down 0.2 pct at $795.25 after breaching
$800 an ounce on Monday. Platinum        was down 0.7 percent at
$946 an ounce.

 (Additional reporting by Vijaykumar Vedala in Bengaluru;
Editing by Richard Pullin and Joseph Radford)
  

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