Gold rose on Friday, rebounding from the previous session’s drop to a one-month low, as heightened tensions between Russia and the West over Ukraine prompted speculators to buy back their bearish bets ahead of the weekend.
For the week, however, bullion posted a near one per cent drop, its second consecutive weekly decline, as encouraging recent US economic indicators lessened the metal’s safe-haven appeal.
Gold prices climbed as Russia said the United States was trying to influence international opinion through unfounded insinuations and anti-Russian rhetoric over the crisis in Ukraine, while the Pentagon said the transfer of rocket systems from Russia to Ukrainian separatists appeared to be imminent.
“With the news flow coming out Russia and Ukraine and you don’t know what’s going to happen in Iraq, traders are buying gold as they don’t want to get too exposed to geopolitical risks going into the weekend,” said Robert Haworth, senior investment strategist at US Bank Wealth Management’s Private Client Reserve.
Spot gold was up 0.7 per cent at 1,301.81 an ounce by 3.03pm EDT (1903 GMT), after losing nearly one per cent on Thursday, when it hit its lowest since June 19 at US$1,287.46. US COMEX gold futures for August delivery settled up US$12.50 at US$1,303.30 an ounce. Weaker US equities dragged by bellwether online retailer Amazon also lifted gold prices.
The market awaited the release of July US non-farm payrolls and the Federal Open Market Committee meeting, both scheduled for next week.
Gold was down 0.7 per cent this week, extending the previous week’s two per cent fall, mostly on speculation that an improving employment sector in the United States could signal an early rate increase by the Federal Reserve. As a gauge of investor sentiment, holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 3.6 tonnes on Thursday – the biggest one-day drop in more than a month.
Silver, platinum and palladium were also headed for weekly losses, with spot silver down about 1.2 per cent for the week. On Friday, it was up one per cent at US$20.52 an ounce. Platinum climbed 0.7 per cent to US$1,471.99 an ounce, while palladium rose one per cent to US$875.75 an ounce. — Reuters