Gold nears one-month high, set for seventh straight monthly rise

NEW YORK: Gold rose to near a one-month high on Friday and was headed for a seventh straight month of gains, supported by geopolitical tensions after the United States and Iran extended nuclear talks, while softer US Treasury yields further boosted bullion.

Spot gold was up 0.8percent at USD5,230.56 an ounce by 01:38 p.m. ET (1838 GMT), hitting its highest level since January 30 earlier in the session. Prices have climbed 7.6percent so far in February.

US gold futures for April delivery settled 1percent higher at USD5,247.90. “There’s a lot of nervousness surrounding geopolitics, you have all the set-up for a high probability of a military operation over the weekend, so it’s a risk-off in a flight to safety,” said Phillip Streible, chief market strategist at Blue Line Futures.

The US and Iran made progress in Thursday’s nuclear talks, mediator Oman said, but hours of negotiations ended without a breakthrough that could avert possible US strikes amid a major military buildup. Meanwhile, the US Embassy in Jerusalem also permitted non-emergency staff and families to leave Israel citing safety risks.

US 10-year Treasury yields slipped to a three-month low, making non-yielding gold more attractive by lowering its opportunity cost. Gold’s next likely upside target is USD5,450, with key support near USD5,120, Streible said.

Data showed that US producer prices increased more than expected in January, suggesting inflation could pick up in the months ahead. Markets are pricing in about a 42percent chance of a 25-basis-point US Federal Reserve rate cut in June, as per the CME FedWatch tool.

Elsewhere, top consumer China’s net gold imports via Hong Kong in January rose by 68.7percent from December, Hong Kong Census and Statistics Department data showed. China’s central bank moved to curb the yuan’s rise by removing risk-reserve rules for forex forwards, encouraging more dollar buying. Spot silver rose 4.8percent to USD92.60 an ounce, on course for a 9.7percent monthly gain.

Spot platinum climbed 3.4percent to USD2,350.34 an ounce, while palladium fell 0.5percent to USD1,775.31. Both metals were headed for monthly gains.