Gold rose on Tuesday on increased safe haven demand as U.S. President Donald Trump‘s tough stance on immigration rattled global markets, with prices finding further support from a weaker dollar.
Traders were also awaiting the U.S. Federal Reserve’s two-day meeting on monetary policy starting on Tuesday for cues on U.S. interest rate hikes.
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.
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The dollar index, which measures the greenback against a basket of currencies, was down 0.1 percent at 100.34.
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.
“There are talks that the ban could affect the tech and energy sectors and this suggests that there could be some growth challenges if the ban is prolonged, so the current risk aversion (driving gold markets) comes as no surprise,” OCBC analyst Barnabas Gan said.
Spot gold may edge up to $1,205 per ounce, as it has pierced resistance at $1,197, according to Reuters technical analyst Wang Tao.
Traders were also eyeing a meeting of the U.S. Fed on Tuesday and Wednesday. The Fed, which raised interest rates in December, has signaled as many as three rate rises 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.
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“The market sentiment is for the Fed to stay pat in the upcoming meeting,” Gan said.
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.
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