Gold and silver futures jumped the most in a week as escalating havoc in Eastern Europe and the Middle East boosted demand for haven assets.
Ukraine and Russia traded accusations of cross-border shelling as tensions between the ex-Soviet neighbors intensified. Gaza Strip violence expanded after dozens of Palestinians and 13 Israeli soldiers died in the conflict’s bloodiest single day.
Gold has climbed 8.6 percent this year. Fighting this month in Gaza has killed more than 800 Palestinians and 35 Israelis, roiling a region in upheaval from Iraq to Yemen. Russian President Vladimir Putin is facing more pressure to expedite the investigation into the crash of a Malaysian passenger jet on July 17 in Ukraine.
“When you see schools shelled in Gaza and heavy artillery fire from Russia and Ukraine, people are very nervous, and you can’t blame them,” Peter Thomas, a senior vice president at Zaner Group LLC in Chicago, said in a phone interview. “As we go into the weekend, with the amount of turmoil that we have, people are going to buy gold.”
Gold futures for December delivery rose 1 percent to settle at US$1,305.30 an ounce at 1:36pm on the Comex in New York, the biggest gain for a most-active contract since July 17. The metal on Friday touched US$1,289.40, the lowest since June 19.
This week, gold fell 0.4 percent, the second straight decline, partly on gains in the US and Chinese economies.
Last year, the metal tumbled 28 percent, the most in three decades, after equities rallied to a record and the US Federal Reserve pared US monetary stimulus as the economy showed signs of improvement.
Silver futures for September delivery rose 1.1 percent to US$20.636 an ounce on the Comex, the largest advance since July 17.
On the New York Mercantile Exchange, palladium futures for September delivery rose 1 percent to US$879.80 an ounce, the biggest gain since July 1. The price dropped in the previous five sessions, the longest slump since Feb. 4. Russia is the top producer of the metal used mostly in pollution-control devices in vehicles.
Platinum futures for October delivery rose 0.3 percent to US$1,478.60 an ounce.
Meanwhile, oil prices rose on Friday, with the New York contract stabilizing, as traders braced for a weekend that could see escalating geopolitical tensions in Ukraine and the Middle East.
The US benchmark futures contract, West Texas Intermediate (WTI) for September, edged up US$0.02 to US$102.09 a barrel.
In London, Brent North Sea crude for delivery in September settled at US$108.39 a barrel, leaping US$1.32 from Thursday’s closing level.
Traders were making some “readjustment” to the WTI price after it fell by US$1.05 on Thursday, Bob Yawger of Mizuho Securities said.
On Wednesday the US contract gained US$0.73 after a report by the US Energy Information Administration said US crude inventories tumbled by four million barrels in the week ending July 18, the fourth consecutive weekly decline and far larger than expected.
The report also showed US gasoline inventories rose 3.38 million barrels, even though many Americans are taking to the road for their holidays in the peak demand summer driving season.
Rising supplies tend to indicate weak demand in the US, which is the world’s top crude oil consuming nation.
“WTI prices are kept pressured under by gasoline inventories, which expanded for the third straight week despite the ongoing driving season in the US,” CMC Markets analyst Desmond Chua said.
Tim Evans of Citi Futures cited a possible “concern that violence in Libya or Iraq could flare over the weekend” as a reason for the price action.
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