Gold prices rise slightly on Friday, thanks to a weaker U.S. dollar and escalating geopolitical concerns. As of 0236 GMT, spot gold gained 0.7%, reaching $2,660.03 per ounce. Meanwhile, U.S. gold futures increased by 0.8% to $2,659.70 per ounce. However, despite these gains, gold remained on track for a 2% weekly decline.
The easing dollar index, down by 0.2%, made gold more attractive for investors holding other currencies. Historically, gold is considered a safe-haven asset during uncertain times, particularly amid geopolitical or economic crises.
Current geopolitical events have significantly boosted gold's appeal. For instance, the Israeli military recently targeted a Hezbollah rocket facility in southern Lebanon. This follows mutual accusations of ceasefire violations. Similarly, Russia has intensified attacks on Ukraine's energy infrastructure, causing widespread power outages.
These developments have led investors to seek gold for its perceived stability. According to Brian Lan, managing director at GoldSilver Central, the weaker dollar and heightened tensions have provided strong support for gold prices.
Despite the recent rise, gold prices may dip below the $2,600 mark and stay in a consolidation phase until the end of December. Markets are currently anticipating a 66.5% probability of a 25-basis-point rate cut by the Federal Reserve in December, which could influence gold’s performance further.
Next week’s key U.S. economic data, including job openings and employment reports, will likely offer insights into the Fed’s monetary policy direction. These reports may shape investor sentiment and determine gold's short-term trajectory.
In addition to gold, spot silver climbed by 1.1% to $30.58 per ounce. Platinum and palladium also rose by 0.9%, closing at $939.75 and $984.25 per ounce, respectively. However, all three metals are set for weekly losses, mirroring gold's performance.
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