Gold futures on Friday climbed above US$1,350 an ounce to reach a 14-month high as rising geopolitical tensions bolster haven demand ahead of next week’s US Federal Reserve meeting, when policymakers might move closer to cutting US interest rates.
The metal has gained 12 of the past 13 sessions.
Investors are also pouring into exchange-traded funds (ETF) backed by gold, with holdings rising to the highest since late February and one buyer making the largest block trade for iShares Gold Trust ETF in almost two months.
A gauge of senior gold mining companies also gained on Friday, with AngloGold Ashanti Ltd leading the rally.
Gold has surged this month, shaking off a lackluster few months as investors brace for more uncertainty on global trade.
Worries have escalated as the administration of US President Donald Trump blamed Iran for attacks on two oil tankers and US National Economic Council Director Larry Kudlow said that Beijing might face consequences if it refuses an invitation to restart talks.
Gold also got help from bets that the Fed will lay groundwork for looser monetary policy next week.
“The news this week has been overridingly gold-friendly,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S. “We have cleared the first of a few major hurdles on route to a potential US$100 extension.”
Bullion might reach US$1,400 this year as investors hedge risk, said Rhona O’Connell, head of market analysis for EMEA and Asia regions at INTL FCStone Inc.
Billionaire trader Paul Tudor Jones earlier this week said that gold is his favorite pick in the next 24 months, and that if prices hit US$1,400, they would quickly move to US$1,700.
Still, investors should not be too quick to attribute the recent rally purely to haven buying, as the US dollar has also been a driver, ABN Amro Bank NV foreign-exchange and precious metals strategy coordinator Georgette Boele said, pointing to trading over the past few hours.
For example, “since the dollar started to move higher on deterioration in sentiment, the rally in gold prices has stalled,” she said.
Also, reports on Friday suggested that the Fed might not need to be in any hurry to trim rates, with US stores and factories reporting a pickup in activity last month.
Gold for August delivery settled 0.1 percent higher at US$1,344.50 an ounce on the Comex in New York, up 0.2 percent for the week. Earlier it touched US$1,362.20, the highest since April last year.
Other precious metals:
Silver for July settlement retreated US$14.805 per ounce, down 1.5 percent for the week, CME Group Inc data showed.
On the New York Mercantile Exchange, platinum settled lower, while palladium rose.
Additional reporting by staff writer
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