NEW YORK: Gold prices touched their highest in three weeks on Friday, supported by a softer dollar and safe-haven buying, while markets braced for potential economic and interest rate changes from US President-elect Donald Trump’s proposed policies.
Spot gold was little changed at $2,657.18 an ounce at 1250 GMT, having earlier hit its highest since Dec. 13 at $2,665.10. Bullion is up about 1.4% for the week so far. US gold futures were steady at $2,671.20. The dollar index fell 0.4% from a two-year high hit in the previous session, making dollar-priced bullion more affordable for holders of other currencies.
“Gold bulls are setting the tone early doors this year, enjoying the lift from safe-haven bids while riskier equities struggle to hold on to nascent gains,” said Exinity Group Chief Market Analyst Han Tan. On the geopolitical front, in Gaza Israeli airstrikes killed at least 68 Palestinians, Gaza authorities said. Elsewhere Russia launched a drone strike on the Ukrainian capital Kyiv on Wednesday, city officials said.
Trump’s inauguration on Jan. 20 has heightened uncertainty, with his proposed tariffs and protectionist policies expected by many economists to be inflationary and potentially spark trade wars. “Markets are aware that Trump’s policies risk reawakening US inflationary impulses, which should be a boon for gold so long as markets adhere to the precious metal’s role as an inflation hedge,” Tan added.
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