Gold Hits Four-Month High As Tensions Flare In Middle East
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 in funds to shore up the slowing economy.
Photo Credit :
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.