Mubasher: Gold prices advanced on Friday, while they were on course to record a weekly increase, as safe-haven demand was boosted by re-kindled trade tensions between Washington and Beijing, global growth worries and prospects of an interest rate cut by the US Federal Reserve, Reuters reported.
By 10:22 am GMT, spot gold rose by 0.21% to $1,406.78 per ounce, while US gold futures went up by 0.11% to $1,408.30 per ounce.
The yellow metal climbed by around 0.9% so far this week.
Federal Reserve Chairman Jerome Powell suggested on Thursday that the central bank is likely to cut borrowing costs at the next policy meeting as businesses scaled back investment due to trade feuds and a global economic downturn.
“We have a slightly weaker US dollar, tensions in the Middle East and once again, prolonged trade dispute between the US and China, which are all supportive,” CMC Markets chief strategist Michael McCarthy was quoted by Reuters.
A slight weakness in the US dollar has given a push to gold prices, making the safe-haven bullion cheaper for non-US currency holders.
However, the US currency gained some traction after data on Thursday showed a pick-up in underlying inflation in the US.
At 10:26 am GMT, the dollar index, which measures the greenback against a basket of six major currencies, ticked down by 0.04% to 97.01.
In addition, Iran’s alleged attempt to intercede a British oil tanker maintained heightened tensions in the Middle East, after an attack on oil carriers and Tehran’s shootdown of US unmanned drone last month.
President Donald Trump said that China was not living up to its own commitments it made on purchasing agricultural products from US farmers.
In the meantime, markets will now focus on trade and lending figures from China on Friday, seeking more cues on the aftermath of the dispute with the US, amid expectations that the world’s second top economy’s growth momentum hit at least 27-year low.
The trade dispute between the US and China spilled over to financial markets and stoked global economic fears, with the latest soft data coming from Singapore.
It is worth noting that gold is deemed a safe investment at times of political and financial uncertainty.