Phone (800) 510-9594

Gold prices edged up on Friday, setting the metal on course for a third week of gains as weaker stock markets spurred investors to seek refuge in bullion, which also gained technical momentum after scaling major milestones.

Spot gold had added 0.2% to $1,226.85 an ounce by 11:15am GMT. The metal has gained 0.7% so far this week, after hitting a two-and-a-half-month high at $1,233.26 on Monday. US gold futures were steady at $1,229.80 an ounce.

“Gold has done really well to hold up here, given the US Federal Reserve was really hawkish. Sensitivity to equity markets is helping gold at the moment,” Macquarie commodity strategist Matthew Turner said. “We are entering a new paradigm, where any further rate hike could be a sign that the economy is overheating a bit, which should be more positive for gold and problematic for equities.”

Every Fed policy maker backed raising interest rates last month, according to September meeting minutes released on Wednesday. Rising interest rates are normally negative for gold as they could boost the dollar and also increase the opportunity cost of holding non-yielding bullion.

In wider markets, European stocks tumbled again as a showdown between Italy’s government and the EU loomed.

“Today’s attempt by gold to lastingly exceed the 100-day moving average looks promising. If it succeeds, technical follow-up buying should push the gold price further up,” Commerzbank analysts said in a note.

“At the same time, gold is resisting the firm dollar. It is finding support from increased risk aversion among market participants, as reflected in falling stock markets, and from additional exchange-traded fund (ETF) inflows.”

Holdings of the SPDR Gold Trust, the largest gold-backed ETF, have gained 2.5% in the past two weeks.

The recent sell-off in global stock markets has boosted gold’s appeal, as some investors see it as a safe store of value during political and economic uncertainty.

In other precious metals, platinum rose 0.7% to $831 an ounce. Palladium gained 0.8% to $1,079.50 an ounce and was up more than 1.4% for the week. Silver was up 0.5% at $14.61.

Share.

Leave A Reply

*