Gold climbed to its highest level in nearly three weeks overnight as calls for impeachment proceedings against US President Donald Trump pushed stocks into the red, with bullion getting a further boost from disappointing consumer confidence data.
Spot gold rose to $US1,527.40 an ounce, having hit its highest since September 5 at $US1,535.60.
US gold futures settled up 0.6 per cent at $US1,540.20.
“There are concerns around impeachment that may have helped unnerve markets a little bit. We saw the US equity markets being pulled to and fro with the ongoing trade tensions,” said Suki Cooper, precious metals analyst at Standard Chartered Bank.
The S&P 500 and the Nasdaq were set for their worst drops in one month on Tuesday after US Representative John Lewis, one of the most senior leaders, joined other Democratic lawmakers in calling for impeachment proceedings to begin against President Donald Trump.
“Over the course of trading today we have seen a combination of concerns around the negative headline, political uncertainty weighing on the stock market and in turn treasury yields come off a little bit, and gold prices being boosted as safe haven asset,” Cooper added.
A weak US consumer confidence data ratcheted up concerns about the global economy, by falling by the most in nine months in September, as the country’s economic outlooks darkened in the face of the US-Chinese trade conflict.
Trump delivered a stinging rebuke to China’s trade practices at the United Nations General Assembly, saying he would not accept a “bad deal” in the ongoing trade negotiations.
Concerns over the global economy have continued to mount of late, with a survey out of the euro zone on Monday showing business growth stalled this month while mixed economic readings out of the United States added to caution over the prolonged US-China trade row.
“Fears of recession are growing in the Eurozone because the weakness in industry now also appears to be spilling over into the services sector,” Commerzbank analysts wrote in a note.
“Gold was therefore in considerable demand as a safe haven yesterday, as reflected in high ETF (exchange-traded fund) inflows.”
Holdings of SPDR Gold Trust GLD, the world’s largest gold-backed ETF, jumped 1.6 per cent to 908.52 tonnes on Monday, the highest since November 2016.
Among other precious metals, palladium jumped 1.2 per cent to $US1,673.05 an ounce after touching a record $US1,675.50 an ounce.
Silver fell 0.8 per cent to $US18.49, having touched its highest since September 6 at $US18.74 earlier in the session while platinum eased 0.4 per cent to $US952.91.