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Gold Inches Up As Trump Impeachment Stokes Political Uncertainty

Gold was up 0.1% at $1,476.69 per ounce, as of 0718 GMT. U.S. gold futures edged up 0.1% to $1,480.70 per ounce.

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Gold prices edged higher on Thursday after the U.S. House of Representatives voted to impeach President Donald Trump, stoking fears of political uncertainty in the world's largest economy.

Spot gold was up 0.1% at $1,476.69 per ounce, as of 0718 GMT. U.S. gold futures edged up 0.1% to $1,480.70 per ounce.

Trump became the third U.S. president to be impeached as the Democratic-led House formally charged him with abuse of power and obstruction of Congress in a historic step that will inflame partisan tensions across a deeply divided America.

Cautious sentiment supported bullion, often seen as an alternative investment during times of political and financial uncertainty.

"The impeachment is resulting in a slight increase of the uncertainties and we're seeing gold inch higher on the back of that," said ANZ analyst Daniel Hynes.

"This news is also offsetting headwinds such as strong equity markets, the (U.S.-China) trade deal and better economic data."

Although the reaction to the impeachment was largely muted, Asian shares pulled back from a one-and-a-half year peak, while the U.S. dollar eased slightly against a basket of currencies, making gold cheaper for holders of other currencies.

If the U.S. Senate convicts, "which would be unexpected, then that throws next year's election in a very uncertain place," Ilya Spivak, a senior currency strategist at DailyFx said, adding that gold prices will then gain on risk aversion.

Capping further gains in bullion, China's finance ministry published a new list of six products from the United States that will be exempt from tariffs starting Dec. 26.

Two U.S. Federal Reserve policymakers on Wednesday said the U.S. economy is in good shape following three interest-rate cuts this year, reiterating the consensus at the Fed for keeping borrowing costs where they are for the time being.

Strong U.S. November manufacturing data released earlier this week also cemented Fed's view. Gold is highly sensitive to any reduction in interest rates, which decreases the opportunity cost of holding non-yielding bullion.

Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.3% to 883.29 tonnes on Wednesday. [GOL/ETF]

Elsewhere, palladium edged up 0.4% to $1,930.18 per ounce. Prices of the autocatalyst metal had hit an all-time peak of $1,998.43 on Tuesday.

Palladium prices are within a whisker of breaking above $2,000 an ounce for the first time, with a gaping supply deficit fuelling a remarkable run.

Silver dipped 0.1% to $16.99 per ounce, while platinum slipped 0.4% to $931.68.


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