Mid-East turmoil pushes safe-haven gold to second weekly rise
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GOLD extended gains on Friday (Oct 20) and headed for a second consecutive weekly gain, as fears of a further escalation in the Middle East conflict fed bullion’s safe-haven appeal.
Spot gold was up 0.3 per cent at US$1,979.39 per ounce by 3.04 pm ET (1904 GMT), after hitting its highest since May earlier in the session. US gold futures settled 0.7 per cent higher at US$1,994.40.
Israel levelled a northern Gaza district after giving families a half-hour warning to escape, and hit an Orthodox Christian church where others had been sheltering, as it made clear that a command to invade Gaza was expected soon.
“People fluttered into gold and found a sense of safety amid geo-political risks. If there is an escalation in the Middle East conflict, gold prices will push through US$2,000,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.
Gold has risen 2.5 per cent this week, and added nearly US$160 since the onset of the conflict.
On the technical front, “failure to trigger a long overdue consolidation and correction back down towards US$1,946 could see prices move higher to eventually challenge resistance around US$2,075, the nominal record high from 2020,” Ole Hansen, head of commodity strategy at Saxo Bank, wrote in a note.
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Traders also digested comments from Fed Chair Jerome Powell on Thursday, who left open the possible need for more rate hikes – which would increase the opportunity cost of holding zero-yield bullion – but also noted emerging risks and a need to move with care.
In physical markets, gold dealers in India were forced to offer steeper discounts as a jump in domestic prices slowed demand ahead of a key festival.
Silver rose 1.4 per cent to US$23.35 per ounce, platinum gained 0.7 per cent to US$896.47. Both were set for their second consecutive weekly rise.
Palladium rose 0.9 per cent to US$1,104.18, but headed for its fourth straight weekly decline. REUTERS
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