GOLD prices were poised for a second consecutive weekly gain on Friday, driven by safe-haven demand amid tensions in the Middle East and rising bets that the US Federal Reserve might reduce interest rates later this year.
Spot gold was up 0.1 per cent at US$2,360.95 per ounce as of 0344 GMT, after hitting a two-week high in the previous session. Bullion gained over 1 per cent so far for the week.
US gold futures rose 0.2 per cent to US$2,374.60.
“In the short-term perspective, the current movement driver of this bullish going gold is primarily driven by rising geopolitical tensions, especially after the news on the attack on Gaza,” said Kelvin Wong, a senior market analyst for Asia Pacific at Oanda.
On Thursday, several Israeli air strikes in the Gaza Strip killed at least 14 people and wounded dozens of others.
“The market is now looking for what is the possibility of another rate cut after September which could be supportive of gold, keeping it above that US$2,300 level,” added Wong.
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Data on Thursday showed that first-time applications for US unemployment benefits fell moderately last week, while new housing construction dropped. This combined with tepid retail sales last month keeps a September US rate cut on the table.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
The next market focus is on the US flash purchasing managers’ indexes due at 0145 GMT.
“While corrections are possible, the support level around US$2,300 remains crucial for gold, with any significant downturn likely influenced by shifts in economic indicators or sudden market movements,” ACY Securities analyst Luca Santos said.
Spot silver fell 0.4 per cent to US$30.60 per ounce, platinum was up 0.4 per cent at US$982.45 and palladium gained 0.8 per cent to US$930.98. All three metals are headed for weekly gains. AFP
