Gold heads for weekly gain as Middle East tensions spur safe-haven demand
Gold prices
climbed on Friday and were poised for a weekly gain, as
Middle East tensions
boosted demand for
safe-haven assets
, while a weaker dollar and expectations of imminent
interest rate cuts
by the
Federal Reserve
also supported bullion.
FUNDAMENTALS
* Spot gold was up 0.8% at $3,412.29 an ounce, as of 0028 GMT. Bullion has gained 3.1% so far this week. * U.S. gold futures gained 1.2% to $3,384.40.
* Gold prices rose as investors turned to safe-haven assets following reports that Israel has begun carrying out strikes on Iran. Two U.S. officials said on Thursday that the United States had no involvement in the operation.
* U.S. President Donald Trump said on Wednesday that U.S. personnel were being moved out of the region as it could be a "dangerous place" and that the United States would not allow Iran to have a nuclear weapon.
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* The
U.S. dollar index
fell to its lowest level in more than three years, making dollar-priced gold more affordable for overseas buyers.
* Signaling a cooling labor market and subdued inflation pressures, the number of Americans filing new applications for unemployment benefits held at an eight-month high last week, while slowing domestic demand helped to restrain producer prices in May.
* The data was released a day after the Labor Department reported a moderate rise in consumer prices in May. * Traders are now expecting a 55-basis-point rate cut by the year-end, starting in September rather than October as previously anticipated.
* Meanwhile, The International Monetary Fund said on Thursday that its next global growth forecast in July will take into account both positive and negative trade developments but declined to predict a tariff-driven GDP downgrade similar to that released by the World Bank this week.
* Elsewhere,
spot silver
was up 0.3% at $36.25 per ounce, platinum rose 0.2% to $1,297.72, while palladium gained 0.6% to $1,062.35. All three metals were headed for weekly gain. DATA/EVENTS (GMT) 0600 Germany HICP Final YY May 0645 France CPI YY NSA May 0645 France CPI MM NSA May 0900 EU Total Trade Balance SA April.
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