Gold prices surged to their highest in nearly two months on Friday, and were on track for a weekly gain as investors sought safe-haven assets after heightened Middle East tensions.
In Dubai, gold rates surged, with 24-carat gold gaining AED3.75 to AED412.5 and 22-carat gold rising AED3.25 to AED381.75. Additionally, 21-carat gold increased by AED3.75 to 366.5, while 18-carat gold inched up AED2.75 to AED313.75.
Globally, spot gold climbed 1.38 percent to $3,426.01 at 4:07 GMT, after hitting its highest since April 22 earlier in the session. Bullion has gained more than 3.5 percent so far this week. Meanwhile, U.S. gold futures rose 1.40 percent to $3,449.95.
Investor focus shifts to safe-haven assets
Gold prices surged as geopolitical tensions in the Middle East escalated after Israel targeted Iran’s nuclear facilities. Rising tensions in the region have shifted investor focus from trade negotiations as they head towards safe-haven assets in response.
Gold prices have surged over their resistance around $3,400 on news of the airstrikes, and further upside is expected if tensions escalate further.
Fed to cut rates earlier as labor market cools
Elsewhere, new data signaled a cooling in the U.S. labor market and subdued inflation pressures. New applications for unemployment benefits held at an eight-month high last week, while slowing domestic demand helped restrain producer prices in May.
The data, released a day after the Labor Department reported a moderate rise in consumer prices in May, bolstered expectations of an earlier rate cut by the Federal Reserve.
Traders are now expecting a Fed interest rate cut of 55 basis points by the end of the year, starting in September rather than October as previously expected.
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Other precious metals
As gold prices surged to a near two-month high, the precious metals market was largely down. Spot silver fell 0.23 percent to $36.29 per ounce, platinum dipped 0.83 percent to $1,284.44, after hovering near a more than 4-year high in the previous session, while palladium was down 0.15 percent to $1,053.99.
