Gold prices hit 4-month high! These tensions are boosting rates
Gold prices climbed to a four-month high on Friday, as tensions mounted in the Middle East after a senior Iranian military official was killed in a U.S. air strike, while a weaker dollar also provided some support to the metal.
Gold prices climbed to a four-month high on Friday, as tensions mounted in the Middle East after a senior Iranian military official was killed in a U.S. air strike, while a weaker dollar also provided some support to the metal. Iranian Major-General Qassem Soleimani, head of the elite Quds Force, and top Iraqi militia commander Abu Mahdi al-Muhandis were killed in the air strike on their convoy at Baghdad airport, the Pentagon said. "News from the Middle East along with some technical buying and a weaker dollar is supporting gold prices today," said Benjamin Lu, analyst at Phillip Futures.
Spot gold hit its highest since Sept. 5 at $1,540.60, and was up 0.7% at $1,539.04 per ounce, as of 0508 GMT. U.S. gold futures gained 0.9% to $1,541.30 per ounce.For the week so far, spot gold gained about 2%, heading for a fourth consecutive weekly increase.
Gold is considered to be a safe investment at time of political and economic uncertainties. Supporting the metal further, the dollar index was down for the second consecutive week against a basket of rivals, making gold cheaper for holders of other currencies.
"If gold prices can sustain the $1,540 level today, then investors will be bullish at least for the short term, but given that the global economy is strengthening, we might see bullion prices soften a bit over the first quarter of 2020," Lu added.
Bolstering hopes for a stronger U.S. economy, the number of Americans filing claims for jobless benefits edged lower last week, a positive signal for the U.S. labour market amid recent signs that new claims may be trending slightly higher. China`s central bank on Wednesday said it was cutting the amount of cash that all banks must hold as reserves, releasing around 800 billion yuan ($114.91 billion) in funds to shore up the slowing economy. Investors now await the minutes of the Federal Reserve`s Dec. 10-11 policy meeting, due at 1900 GMT. Lower interest rates reduce the opportunity cost of holding non-yielding bullion.Indicative of investor sentiment, holdings of the world`s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.23% to 895.30 tonnes on Thursday, its highest since Nov. 29.
Among other precious metals, silver rose 0.5% to $18.12 per ounce, for the fourth straight week, while platinum gained 0.2% to $980.19, set for about a 4% weekly gain.
Palladium climbed 0.2% to $1,962.65 per ounce, on track for more than 3% weekly gain.
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