Mumbai, 22 Jun (Commoditiescontrol): Gold prices achieved their second consecutive weekly gain on Friday, buoyed by safe-haven demand amid escalating tensions in the Middle East and increasing speculation that the U.S. Federal Reserve might reduce interest rates later this year. Despite this weekly increase, the yellow metal saw a slight dip on Friday due to profit-taking activities.
Spot gold declined by 0.3% to $2,321.87 per ounce after reaching a two-week high in the previous session. Throughout the week, bullion prices have risen over 1%. U.S. gold futures dropped by $34.30, settling at $2,334.70.
The recent bullish trend in gold is primarily driven by geopolitical tensions, particularly following the news of an attack on Gaza. On Thursday, Israeli airstrikes in the Gaza Strip resulted in the deaths of at least 14 people and injuries to dozens more, intensifying regional instability and boosting gold’s appeal as a safe haven.
Market analysts are now closely monitoring the possibility of another U.S. rate cut after September, which could further support gold prices, maintaining them above the crucial $2,300 level. Thursday's data revealed a moderate decline in first-time applications for U.S. unemployment benefits, while new housing construction also dropped. Combined with tepid retail sales last month, these indicators suggest a September rate cut remains plausible.
Lower interest rates decrease the opportunity cost of holding non-yielding assets like gold, making them more attractive to investors. While corrections in gold prices are possible, the $2,300 support level remains vital, with significant downturns likely influenced by economic shifts or abrupt market changes.
In other precious metals, spot silver fell by 0.6% to $29.57 per ounce, platinum edged up by 0.04% to $994.00, and palladium slightly decreased by 0.08% to $992.00. Despite these mixed movements on Friday, all three metals have posted weekly gains.
(By Commoditiescontrol Bureau: 09820130172)
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