Photo: Reuters
Gold prices rose on Friday (19 April) and were poised for a fifth straight week of gains, as investors rushed to the safe-haven asset as escalating tensions between Iran and Israel fuelled fears of a wider regional conflict.
Spot gold was up 0.1% at $2,380.68 per ounce as of 1040 GMT, after rising to as high as $2,417.59 earlier in the session. Prices were up over 1% this week.
U.S. gold futures rose 0.1% at $2,396.60.
Explosions echoed over an Iranian city on Friday in what sources described as an Israeli attack, but Tehran played down the incident and indicated it had no plans for retaliation.
"The geopolitical situation with retaliation of Iran and the latest attack in the Iranian state has raised the risk that the conflict will escalate and is helping safe-haven gold," said Quantitative Commodity Research analyst Peter Fertig.
Meanwhile, U.S. Federal Reserve policymakers have coalesced around the idea that there is no urgency to cut interest rates, given the slow progress on inflation and a resilient U.S. economy.
Commerzbank said in a note that it expects gold to end the year at $2,300 compared with $2,200 previously, although it remains sceptical about the further upside potential as gold's rise runs counter to the trend in U.S. rate expectations.
Higher interest rates reduce the appeal of holding non-yielding bullion.
Gold, which has notched strong gains this year, will rise further on robust Chinese demand outlook and macro uncertainties, Chinese state-backed research house Antaike said.
Spot silver rose 0.1% to $28.25 per ounce and was up 1.4% for the week.
Silver is set to outperform gold as its cheaper price and strong fundamentals are likely to see more investment demand, ANZ said in a note.
Source: Reuters
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