Gold edges higher as softer dollar lends support
Gold prices rose on Friday and were headed for their first weekly gain in a month, supported by a softer dollar and tensions in the Middle East.
Spot gold was up 0.4% at $1,505.06 per ounce, as of 0640 GMT, having risen about 1% so far this week. U.S. gold futures were up 0.5% at $1,513.5 per ounce.
“A weaker U.S. dollar is giving gold a little bit of an upward drift,” said Michael McCarthy, chief market strategist at CMC Markets, adding that “prices are still very much in the middle of a trading range and pinned to $1,500 level.”
The dollar nursed losses against most major currencies, as central banks in Switzerland and the UK refrained from cutting rates, while risk appetite ebbed on caution about U.S-China trade talks.
“Investors are all waiting on any further developments in the trade negotiations as they move towards October meeting and that may provide next big driver for gold prices,” McCarthy said..
Gold prices have risen about 17% this year mainly on U.S.-China trade tensions, concerns over the global economic growth outlook and prospects of monetary easing by central banks.
The Fed cut interest rates for the second time this year on Wednesday to help sustain economic expansion but gave mixed signals on future rate cuts.
Also, giving bullion a lift were tensions in the Middle East as the United States said on Thursday it was building a coalition to deter threats following a weekend attack on Saudi Arabian oil facilities.
The strategy for retaliation against the attacks on Saudi oil plants is not clear and the uncertainties are keeping gold’s safe-haven bid intact, said Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade.
On the technical front, signals are mixed for spot gold as it is stuck in a narrow range of $1,488-$1,514 per ounce, according to Reuters technical analyst Wang Tao.
Elsewhere, palladium rose 1.2% to $1,642 per ounce, having earlier climbed to a record peak of $1,646.81.
Platinum was up 0.7% to $943.37 per ounce and silver gained 0.9% to $17.93.