Geopolitical tensions are back on the radar, helping spur haven demand for gold.
The Pentagon on Friday demanded that China immediately return a US Navy underwater drone captured in the South China Sea, sparking new friction in a region where China has sought increasing control. The S&P 500 Index of equities slipped.
Gold futures for February delivery on Friday gained as much as 1.2 percent to US$1,143.20 an ounce, before settling at US$1,137.40 at 1:41pm on the Comex in New York.
Prices still posted a sixth straight weekly loss, falling 2.1 percent, in the worst streak in more than a year.
“Traders are always mindful of geopolitical events,” Bob Haberkorn, a senior market strategist at RJO Futures in Chicago, said in a telephone interview. “Geopolitical risks are bringing life back into gold.”
Richmond US Federal Reserve Bank President Jeffrey Lacker said policymakers might need more than three interest rate increases next year, hurting demand for non-interest bearing assets like gold.
Prices slumped 2.9 percent on Thursday, a day after the Fed raised borrowing costs for the first time this year and new projections showed officials expect three quarter-point rate increases next year.
“The story will continue to always revert back to the Fed,” Haberkorn said.
Other metals:
Silver futures rallied on the Comex.
Platinum climbed 4.5 percent, the steepest gain since March for a most-active contract on the New York Mercantile Exchange.
Palladium fell.
Copper had its biggest weekly drop since August after stockpiles tracked by the London Metal Exchange jumped the most since 1970 in the period.
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