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(Sept 25): Gold steadied after posting its longest rally in three months as investors weighed growing political tensions in the US, which reinforced demand for havens that have already benefited from central bank easing, slowing growth and the trade war. Palladium notched a fresh record.

The traditional haven was supported as Speaker Nancy Pelosi said the House opened a formal impeachment inquiry into President Donald Trump following revelations he pushed Ukraine’s government to investigate Joe Biden. Adding to tensions is the uncertainty surrounding planned high-level US-China trade talks in October after Trump laid into Beijing in a speech at the United Nations.

Bullion is heading for a fifth monthly advance as the Federal Reserve and central banks globally cut interest rates to prop up economies hurt by the prolonged trade war. Weakening US consumer confidence also dented sentiment. The possibility Trump will face impeachment is adding to the raft of concerns weighing on markets, even as the president said he would release a transcript on Wednesday of his phone call with the Ukrainian leader.

“The move in gold looks convincing enough to warrant some attention as it’s unlikely the political storm clouds over Washington are about to dissipate any time soon,” Stephen Innes, Asia-Pacific market strategist at AxiTrader, said in a note. This “might continue to weigh on equity market sentiment, possibly send US yields lower and could undermine confidence in the US dollar.”

Spot gold fell 0.1% to US$1,529.73 an ounce ($2106.2 an ounce) at 7:29am in London. Prices capped four days of gains on Tuesday, the longest run since June 25, and the precious metal is 19% higher this year. Spot palladium rose to an all-time high of US$1,677.45 an ounce, before retreating.

Worldwide holdings in exchange-traded funds backed by gold inched up to register a fresh six-year high. Total known assets stood at 2,494.3 tons as of Tuesday, heading for the biggest quarterly rise since the three-month period to June 2016, according to data compiled by Bloomberg.

Gold is expected to be supported in the short term and may hit US$1,600 an ounce, according to Howie Lee, an economist at Singapore-based Oversea-Chinese Banking Corp. “Global economic growth remains vulnerable, while markets continue to be sensitive to US-China trade tension headlines,” Lee said in a note.