Gold in ‘uncharted territory’, set for sixth successive weekly gain

Bengaluru — Gold prices rose on Friday, hovering near record-high levels, set for a sixth successive weekly gain as trade war concerns fuelled safe-haven buying ahead of the key US payrolls report.

Spot gold was up 0.4% at $2,867.69/oz, as of 2.50am GMT, and has gained more than 2% this week. Bullion hit a record high at $2,882.16/oz on Wednesday.

US gold futures gained 0.5% to $2,889.80/oz.

“It’s still a trending market and we will continue to see gold prices pushing to newer heights because now it’s uncharted territory,” said Brian Lan, MD at Singapore-based dealer GoldSilver Central.

Earlier this week, the World Trade Organisation said China initiated a dispute over the US tariffs.

Goldman Sachs said they see upside risk to their $3,000 target from a potentially persistent boost from elevated US policy uncertainty to central bank and investor hedging demand.

Focus now shifts to the US employment report, due at 1.30pm GMT, which investors will scan for any hints on the US interest rate cycle.

A full-employment economy with solid growth and falling inflation will let the Federal Reserve continue cutting rates, though uncertainty about the effects of tariffs and other policy changes argues for a slower approach, Chicago Federal Reserve president Austan Goolsbee said on Thursday.

Gold is considered a safe investment during economic and geopolitical turmoil, but higher interest rates reduce the non-yielding asset’s appeal.

However, “we expect the Fed will be cutting another 100 basis point this cycle. This will see US treasury yields falling ... reducing the holding cost for gold,” ANZ noted.

Spot silver added 0.2% to $32.26/oz and platinum increased 0.6% to $991.10, while palladium shed 0.2% to $976.25.

Both silver and platinum were seen rising this week, while palladium was headed for a weekly loss. 

Reuters