Haven Demand Spurs Higher Gold Prices

Investors decided to switch to the relative stability of bullion as Dutch voters prepare to cast their ballots on March 15 to elect the next prime minister. The vote has become some sort of a bellwether for populist sentiment on the continent, as Euro-skeptic Geert Wilders, who heads the Party for Freedom, gathers momentum, capitalizing on rising anti-immigration sentiment.

Gold has rallied off the key support at $1200, and was last trading just shy of $1210 per troy ounce. Meanwhile, SPDR Gold Trust, the world's largest gold backed ETF, slashed its holdings by -1.06% to 825.22 tonnes on Friday.  This comes amid money managers reducing their net long positions in the metal from the highest level in 3 months per the latest data from the US Commodity Futures Trading Commission.

The Euro climbed to its highest level in over a month against the US dollar in early Monday trade as the markets reassessed the odds of a December rate hike from the European Central Bank. Mildly hawkish comments from ECB President Mario Draghi brought Euro bulls back to the market, pushing the common currency to as high as 1.0705 against the greenback in morning trade.

However, several leading media outlets report that even though some members of the Central Bank’s Governing Council did indeed discuss the possibility of higher rates at its latest policy meet, the idea did not receive broad based support. The ECB intends to keep buying government bonds until the end of current year, and is widely expected to extend the quantitative easing programme into 2018, albeit at a slower pace.