Gold prices surged on Friday, marking their fifth consecutive weekly gain as investors sought refuge in safe-haven assets amidst escalating political tensions in the Middle East. The price of gold hit $2,388.49 per ounce, up 0.4% from the previous day, while US gold futures rose by 0.2% to $2,403.30 per ounce.
The surge in gold prices came amidst the US announcing new sanctions on Iran, targeting its unmanned aerial vehicle production following an attack on Israel. Meanwhile, the Federal Reserve signaled its intention to maintain low borrowing costs until later in the year, citing sluggish inflation and a strong US economy.
However, concerns over potential interest rate hikes lingered, with Atlanta Federal Reserve Bank President Raphael Bostic indicating that a rate hike could be on the table if inflation progress stalls. Higher interest rates typically diminish the appeal of holding non-yielding assets like gold.
In addition to gold, silver also saw a significant uptick, with analysts predicting a potential surge to $30 per ounce following a 26% increase in March-April. Despite this positive outlook, South Africa’s Sibanye Stillwater announced plans to close its 4 Belt shaft at Marikana, shedding 855 jobs due to low platinum group metal prices.
As Asian markets navigate a challenging week marred by global uncertainties, the outlook remains cautious. Spot silver rose by 0.7% to $28.41 per ounce, platinum increased by 0.6% to $940.70, while palladium fell by 0.6% to $1,016.25 per ounce. Investors will keep a close eye on geopolitical developments and market trends as they look towards a potential positive end to the week.
