US MIDDAY: gold hits six-year peak

Updated 15 Jan, 2021

Gold prices surpassed $1,400 on Friday before retreating, still holding near a six-year high on the US central bank's dovish stance on monetary policy. Prices also found support from worries about a potential US military strike against Iran and a global trade conflict. Spot gold rose 0.6% to $1,396.34 per ounce as of 1:50 p.m. EDT (1750 GMT). US gold futures settled 0.2% higher at $1,400.10 per ounce.Prices surged to $1,410.78 in the session, a high not seen since early September 2013, and were set to mark their best week in over three-years. Bullion rates have jumped more than 5% since the US Federal Reserve on Wednesday hinted interest rate cuts were possible later this year, as it responded to increased economic uncertainty and tepid inflation. "Gold is seeing a continuation move from bullish comments throughout the week, most notably the fact that world central banks easing monetary policy is generally very supportive for commodities overall, particularly gold," said David Meger, director of metals trading at High Ridge Futures.Middle East tensions have supported the gold market, while the US-China trade war continues to concern investors, he added. After initially approving military strikes against Iran in retaliation for the downing of an unmanned surveillance drone, US President Donald Trump pulled back from launching the attacks. Gold is often considered a safe haven in times of political and economic uncertainty.US-China trade talks are set to resume ahead of a G20 meeting next week. Hopes for an agreement have grown somewhat, but neither side has signaled a shift from positions that led to an impasse last month. Gold prices traded within a wide range of $28.78, retreating from the more than $1,400 level touched earlier in the day. "The levels above $1,400 are near term resistance, so you would not be surprised to see the market consolidate around this psychological level," High Ridge Futures' Meger said. Among other precious metals, silver dipped 1% to $15.27 per ounce, while platinum was up 0.8% at $808.75. Palladium climbed 1.5% to $1,500.51 an ounce and was headed for a third consecutive weekly gain.

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