Thursday, July 18, 2024

Gold prices are headed for a third week of gains as the war in the Middle East escalates

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© Reuters. A man unwraps a gold bar blanket in Beijing with a Reuters archive photo.

(Reuters) – U.S. interest rates were on track for a third consecutive week of gains on Friday as conflicts in the Middle East led investors to increasingly seek safe havens, despite long-term highs.

By 0341 GMT, it was up 0.1 percent at $1,986.76 an ounce, while US gold futures were little changed at $1,996.80.

“The price of gold will be one of the factors affected by the conflict between Hamas as long as things are at risk of escalating,” said Kyle Rhoda, financial markets analyst at Capital.com.

Gold rose about nine percent as investors sought it as a safe haven from the potential fallout from the war between Israel and the Palestinians that escalated earlier this month.

But expectations of higher U.S. interest rates have kept gold prices below the $2,000 ceiling, which was last May’s high.

“Gold is holding back due to geopolitical risks, prices are deviating from traditional fundamental drivers… if it’s due to Treasury yields and the dollar, gold will be lower,” Rota added.

That leads to weekly gains on Friday, while yields rose 0.2 percent after data showed U.S. economic growth rose at the fastest pace in nearly two years in the third quarter.

U.S. Treasury Secretary Janet Yellen said the U.S. economy’s growth of about five percent in the third quarter is a good sign that the economy is headed for a moderate slowdown, but it could contribute to keeping long-term Treasury bond yields high.

Investors are also looking to U.S. personal consumption expenditure price index data due later on Friday for signs of what to expect from the Federal Reserve’s policy meeting next week.

See also  Oil staples ease fears of rising interest after U.S. inventories fall Reuters

As for other precious metals, they settled at $22.84 per ounce in spot transactions. Platinum was up 0.5 percent at $904.71 and up 0.2 percent at $1,135.65.

(Prepared by Rehab Ala for Arabic Bulletin)

Nadia Barnett
Nadia Barnett
"Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator."

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