(Reuters) -Gold prices climbed on Friday to their highest point in more than a month, on track for a weekly gain, as investors sought safe-haven assets after Israel’s strike on Iran heightened Middle East tensions.
Spot gold was up 1.3% at $3,428.28 an ounce, as of 0134 GMT, after hitting its highest level since May 7 earlier in the session. Bullion has gained more than 3.5% so far this week.
U.S. gold futures gained 1.4% to $3,449.60.
Geopolitical tensions escalated after Israel struck Iran as tensions mounted over U.S. efforts to halt Iran’s production of atomic bomb materials.
“This latest spike in hostilities in the Middle East has taken the focus off trade negotiations for now, with investors making a play towards safe-haven assets in response,” said Tim Waterer, chief market analyst at KCM Trade.
Israel declared a state of emergency, citing expected missile and drone attacks from Tehran, and the U.S. military is preparing for various contingencies in the Middle East, including potential assistance with evacuating American civilians, a U.S. official told Reuters on condition of anonymity.
“Gold surged past resistance around the $3400 on news of the airstrikes, and further upside could be in-store should the escalation continue,” Waterer said.
Signaling a cooling U.S. labor market and subdued inflation pressures, the number of Americans filing new applications for unemployment benefits held at an eight-month high last week, while slowing domestic demand helped to 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.
Traders are now expecting a 55-basis-point rate cut by the year-end, starting in September rather than October as previously anticipated. [USDIRPR]
Elsewhere, spot silver edged down 0.1% at $36.33 per ounce, platinum fell 0.8% to $1,285.21, while palladium was steady at $1,055.21. All three metals were headed for weekly gain.
(Reporting by Anmol Choubey in Bengaluru; Editing by Sherry Jacob-Phillips)
