BENGALURU: Gold prices rose on Friday, setting the metal on course for a third week of gains as weaker stock markets spurred investors to seek refuge in bullion, which also gained technical momentum after scaling key milestones.
Spot gold added 0.3 percent to $1,228.31 per ounce by 0958 GMT. The metal has gained 0.9 percent so far this week, after hitting a 2-1/2-month high at $1,233.26 on Monday.
US gold futures were up 0.1 percent at $1,231.50 an ounce.
"Gold has done really well to hold up here, given the Fed was really hawkish. Sensitivity to equity markets is helping gold at the moment," said Macquarie commodity strategist Matthew Turner.
"We are entering a new paradigm, where any further rate hike could be a sign that the economy is overheating a bit, which should be more positive for gold and problematic for equities."
Every Federal Reserve policy maker backed raising interest rates last month, according to September meeting minutes released on Wednesday.
Rising rates are normally negative for gold since they could boost the dollar and also increase the opportunity cost of holding non-yielding bullion.
In wider markets, European stocks tumbled again as a showdown between Italy's populist government and the European Union loomed.
"Today's attempt by gold to lastingly exceed the 100-day moving average looks promising. If it succeeds, technical follow-up buying should push the gold price further up," Commerzbank analysts said in a note.
"At the same time, gold is resisting the firm US dollar. It is finding support from increased risk aversion among market participants, as reflected in falling stock markets, and from additional ETF (exchange traded fund) inflows."
Holdings of the SPDR Gold Trust, the largest gold-backed ETF, have gained 2.5 percent in the past two weeks.
The recent sell-off in global stock markets has boosted gold's appeal, as some investors see it as a safe store of value during political and economic uncertainty.
In other precious metals, platinum rose 0.6 percent to $830.50 per ounce.
Palladium gained 1 percent to $1,081 per ounce and was up over 1.4 percent for the week. Silver was up 0.6 percent at $14.63.
Comments
Comments are closed for this article.