London: Gold rose on Friday and was on track for its best week in five as the dollar softened on political turbulence in the United States, boosting bullion’s safe-haven appeal.
Spot gold was up 0.5 per cent at $1,253.31 (Dh4,603.53) per ounce, as of 1151 GMT, putting it up 1.9 per cent for the week. US
gold futures slipped 0.1 per cent to $1,251.60 an ounce.
“Political risk is back on again after market participants became overly complacent following the outcome of the French elections,” Commerzbank analyst Carsten Fritsch said.
“Risk sentiment took a major hit,” he said.
Gold is often seen as an alternative investment during times of geopolitical and financial uncertainty, gaining alongside bond yields and the yen while stocks usually take a hit.
US President Donald Trump last week fired FBI Director James Comey, triggering a political firestorm which culminated on Wednesday in the Justice Department’s appointment of a special counsel to probe possible ties between Russia and Trump’s 2016 presidential campaign. The dollar index, which measures the greenback against a basket of six major currencies, was headed for its worst week in nine months while world stocks were set for the first weekly fall in five.
New applications for US jobless benefits unexpectedly fell last week and the number of Americans on unemployment rolls tumbled to a 28-1/2-year low, pointing to rapidly shrinking labour market slack.
“Safe-haven buying has provided strong support to gold prices over the past six months,” ANZ said in a note.
“However, rising geopolitical risks in the US and elsewhere are likely to propel prices even higher, despite the spectre of a rate hike in the US next month.”
Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.14 per cent to 850.71 tonnes on Thursday.
Among other precious metals, palladium gained 0.3 per cent to $765.85 per ounce. The metal slipped 5 per cent this week and was poised for its biggest weekly fall since late January.
Platinum rose 0.6 per cent to $937.39 an ounce while silver climbed 1.5 per cent to $16.79 an ounce. Both metals were headed for their strongest week since mid-April.