Gold prices climb due to demand for safe haven
Gold prices climbed on Friday, supported by safe-haven demand arising from the Middle East conflict, while spotlight shifted towards US payrolls report to gauge the trajectory of the Federal Reserve’s policy path.
Spot gold was up 0.3% at $2,662.50/oz, as of 3.25am GMT, after climbing to a record high of $2,685.42/oz on Sept. 26. Bullion has gained 0.2% for the week.
US gold futures edged 0.1% higher to $2,682.10/oz.
The dollar eased 0.1%, pulling back from over a one-month high, making greenback-priced bullion less expensive for other currency holders.
Geopolitical tension, particularly concerning Israel and Iran, are supporting gold prices and unless these risks subside, prices are likely to remain near record levels, said Ajay Kedia, director at Kedia Commodities, Mumbai.
The US is discussing strikes on Iran’s oil facilities as retaliation for Tehran’s missile attack on Israel, President Joe Biden said, while Israel’s military hit Beirut with new air strikes in its battle against Lebanese armed group Hezbollah.
Bullion is considered a safe investment during times of political and financial uncertainty, and thrives in a low-rate environment.
The US nonfarm payroll data is due at 12.30pm GMT. New York Fed president John Williams and Chicago Fed president Austan Goolsbee are also scheduled to speak later in the day.
If the NFP report comes in strong, it will be positive for the dollar and then gold prices will see some profit-booking, Kedia added.
Traders see a 69% chance of a 25-basis-point Fed rate cut in November, according to CME FedWatch Tool.
BMI said in a note it expects gold prices to trade within the range of $2,500/oz to $2,800/oz in the coming months.
Spot silver rose 0.4% to $32.17/oz and has gained about 1.8% so far this week. Platinum climbed 1.1% to $1,001.79/oz and palladium advanced 1.4% to $1,013.46.
Source: http://in.reuters.com