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19/06/2016 00:19 AST
Gold rose on Friday, supported by a softer dollar, and was heading for a third week of gains following a cautious note from the Federal Reserve on interest rates and uncertainty ahead of Britain’s vote on European Union membership.
The metal, often seen as an insurance in times of financial and economic uncertainty, peaked at $1,315.55 on Thursday, its strongest since August 2014.
Gold then slid 1 percent as financial markets reacted to the suspension of campaigning for June 23’s British referendum after a lawmaker was shot dead.
Spot gold rose 0.8 percent to $1,288.33 an ounce at 1157 GMT.
Bullion has risen 1.1 percent so far this week. US gold for August delivery fell 0.5 percent to $1,291.80 an ounce.
“Gold is reverting to its safe-haven role, in a situation where euro zone government bonds are in negative yield territory and investors have fewer safe assets to choose from,” Mitsubishi Corp. strategist Jonathan Butler said. “The other major piece of news this week has been the Fed’s downgrade of GDP growth and its unchanged inflation expectations ... all of these factors are supportive of rates remaining low and ... favorable to gold.”
Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding the precious metal. Sterling-denominated gold rose to a three-year high on Thursday, while the metal priced in euros reached its highest since April 2013, due to the weakening of both currencies against the dollar ahead of the referendum. The Bank of England escalated its warnings about fallout from the vote, saying it could harm the global economy and that sterling looked increasingly likely to weaken further if “Leave” wins.
“Leading into the Brexit vote, we expect gold to remain around current levels between the $1,270-$1,300 range. But after then all bets are off as everything depends on the results of the referendum,” ANZ commodity strategist Daniel Hynes said.
The dollar slipped 0.2 percent versus a basket of major currencies on Friday, making dollar-denominated assets such as gold cheaper for holders of other currencies.
Reflecting renewed optimism toward gold, holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose to 902.53 tons on Thursday, the highest since October 2013.
Silver rose 1.4 percent to $17.38 an ounce after falling 2 percent on Thursday.
Platinum rose 1 percent to $973.75 and palladium gained 0.9 percent to reach $536.05.
Arab News
Ticker | Price | Volume |
---|---|---|
SABIC | 114.77 | 5,915,941 |
(In US Dollar) | Change | Change(%) | |
---|---|---|---|
Gold | 1,332.2 | -8.6 | -0.64 |
Silver | 16.4 | -0.21 | -1.23 |
Platinum | 923 | -9 | -0.97 |
Palladium | 929 | -3 | -0.32 |
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