By Apeksha Nair
REUTERS - Gold steadied above a key psychological level of $1,300 on Monday, buoyed by worries over Iran, while a firmer dollar weighed on sentiment.
Spot gold was unchanged at $1,304.86 an ounce as of 0734 GMT, while U.S. gold futures for December delivery were up 0.2 percent at $1,307.50 per ounce.
Geopolitical risks, including the ongoing tensions over Iran and North Korea, are likely to persist this week, Jeffrey Halley, a senior market analyst with OANDA, said in a note.
"This should all combine to ensure that gold maintains a safe-haven tone this week," Halley said.
The dollar edged up on Monday but lacked momentum, and Asian shares rallied to a decade high as upbeat Chinese data boosted commodity prices.
The euro extended losses after Catalan leader Carles Puigdemont failed to give a clear answer to whether or not he declared independence from Spain.
On Friday, gold gained about 0.9 percent after U.S. President Donald Trump warned he might ultimately end a 2015 nuclear agreement with Iran and after data showed underlying inflation remained muted in the United States.
Senior Trump administration officials said on Sunday that the United States was committed to remaining part of the Iran nuclear accord for now.
The weaker-than-expected U.S. inflation print helped push Treasury yields lower, giving a fillip to gold trade above $1,300, said John Sharma, an economist with National Australia Bank.
Spot gold may break a resistance at $1,305 per ounce and rise to the next resistance at $1,318, Reuters technicals analyst Wang Tao said.
"Prices have established themselves above $1,300, although upside may be little bit limited, we would expect to see them remain at $1,300-1,310 mark over the course of the week," said ANZ analyst Daniel Hynes.
"The market's still surely pricing in a rate hike this year by the U.S. Federal Reserve."
The U.S economy remains strong and the strength of the labour market calls for continued gradual increases in interest rates despite subdued inflation, Fed Chair Janet Yellen said on Sunday.
Rising interest rates tend to boost the dollar and push bond yields up, putting pressure on the greenback-denominated, non-yielding gold.
Speculators cut their net long position in COMEX gold contracts for a fourth straight week in the week to Oct. 10, data showed on Friday.
Silver was up 0.4 percent at $17.41 an ounce after hitting its highest since mid-September earlier in the session.
Platinum eased 0.3 percent to $941.74 an ounce.
Palladium was 1.4 percent higher at $1,001.97 an ounce after earlier hitting its highest since February 2001 at $1,004.70.
(Reporting by Apeksha Nair in Bengaluru; Editing by Joseph Radford and Subhranshu Sahu)
Disclaimer: No Business Standard Journalist was involved in creation of this content
