By Renita D. Young
NEW YORK/LONDON (Reuters) - Gold rose on Thursday as the U.S. dollar backed away from 2018 highs after weaker-than-forecast U.S. inflation data and as tensions between the United States and Iran also supported the precious metal.
The dollar slipped from a 4-1/2-month peak after U.S. data showed the Consumer Price Index rose 0.2 percent in April, less than the 0.3 percent increase that had been forecast. A weaker dollar makes dollar-priced gold cheaper for non-U.S. investors.
Also helping gold, viewed as a safe-haven investment, was U.S. President Donald Trump's move on Tuesday to withdraw from a nuclear accord with Iran, raising the risk of conflict in the Middle East.
Israel said on Thursday it had attacked nearly all of Iran's military infrastructure in Syria after Tehran fired rockets at Israeli-held territory.
"We've seen a (dollar rally) in the last few weeks, but actually gold hasn't gone down as far as you might think, so political tensions are helping," said Macquarie commodities strategist Matthew Turner.
Turner said the dollar was the main driver for gold and he expects the precious metal to come under pressure in the near term, with the dollar extending its rally.
Spot gold rose 0.6 percent at $1,320.53 per ounce by 1:34 p.m. EDT (1734 GMT). During the session it touched $1,322.76, a 10-day high. U.S. gold futures for June delivery settled up $9.30, or 0.7 percent, at $1,322.30 per ounce.
Risk appetite among investors limited gold's gains. Global equities hit a three-week high as rising oil prices boosted energy companies, offsetting increased political uncertainty.
"It appears as though the investment side of the equation has not attracted a lot of attention," said Rob Lutts, chief investment officer of Cabot Wealth Management
"We are at the lower end of the range. It appears we could drift back up to $1,350, but longer term. We really need to see more investment."
North American gold-backed exchange-traded funds registered inflows in April at their highest level since September 2017, with safe-haven purchases ushered in by a trade stand-off between the United States and China, Syria tensions and worries about possible U.S. sanctions on Russia.
In other precious metals, silver gained 1.4 percent at $16.72 an ounce after earlier hitting a two-week high at $16.74.
Platinum rose 1.7 percent at $925.40 per ounce, earlier hitting $926.20, a two-week high. Palladium rose 2.6 percent at $1,000.70 per ounce, earlier seeing $1,002.10, a 2-1/2-week high.
(Additional reporting by Apeksha Nair in Bengaluru; editing by David Goodman and David Gregorio)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Updated Date: May 11, 2018 00:07 AM