NEW YORK: Gold prices rose 1percent to a seven-week high on Friday, bolstered by a soft dollar, expectations of interest rate cuts and safe-haven demand prompted by geopolitical turbulence, while silver hit a record high.
Spot gold rose 1percent to USD4,327.31 per ounce by 1248 GMT, its highest level since October 21, and was set for a 3.1percent weekly gain.
US gold futures gained 1.2 percent to USD4,363.20. The dollar hovered near a two-month low, and was on track for a third straight weekly drop, making bullion more affordable for overseas buyers. “The sharp rise in US weekly jobless claims as well as US-Venezuela tensions are underpinning gold and keeping haven demand strong,” said Zain Vawda, analyst at MarketPulse by OANDA.
US jobless claims rose by the most in nearly 4-1/2 years last week, reversing the sharp drop seen in the previous week. The US Federal Reserve trimmed rates by 25 basis points for the third time this year on Wednesday, but indicated caution on additional cuts.
Investors are currently pricing in two rate cuts next year, and next week’s US non-farm payrolls report could provide further clues on the Fed’s future policy path.
Non-yielding assets such as gold tend to benefit in low-interest-rate environment. On the geopolitical front, the US is preparing to intercept more ships transporting Venezuelan oil following the seizure of a tanker this week.
Meanwhile, India saw widening gold discounts this week as demand remained subdued despite the wedding season, while high spot prices dented demand in China.
Spot silver rose 0.8 percent to USD64.09 per ounce, after hitting a new record high of USD64.56/oz, and is headed for a 10percent weekly gain. Prices have more than doubled this year, supported by strong industrial demand, dwindling inventories and its inclusion on the US critical minerals list.
“Silver is supported by industrial demand amid fears of shortages, a continued tight market, and the speculative frenzy, mostly from retail investors which has helped drive inflows to Silver ETFs,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Elsewhere, platinum was up 3.2 percent at USD1,750.35, while palladium climbed 2.6 percent to USD1,523.10. Both were headed for a weekly rise.
Comments
Comments are closed for this article.