Gold prices rose on Friday as risk aversion swept across financial markets after media reports about explosions in Iran, prompting fears of a wider regional conflict and increasing bullion's safe-haven appeal.
Spot gold rose 0.3% at $2,386.05 per ounce, as of 4.29 GMT, after briefly jumping as high as $2,417.59 earlier in the session, not far from an all-time high of $2,431.29 hit last Friday. Bullion was set for a fifth straight weekly rise and has risen about 2% so far this week.
US gold futures rose 0.1% at $2,401.20.
The news of Israel's attacks on Iran today "is driving gold price attention on the Middle East, which has been the sole thing keeping the gold price moving higher for weeks. Market is waiting for more information about the nature of the attack, and what the response would be," said Kyle Rodda, a financial market analyst at Capital.com.
"Gold is not a monetary policy trade at the moment, it's a geopolitics trade."
Israel has attacked Iran, three people familiar with the matter said, as Iranian state media reported early on Friday that its forces had destroyed drones days after Iran launched a retaliatory drone strike on Israel.
Safe haven gold rises as Israeli attack on Iran raises concerns of wider conflict
Image: 123RF/DARI HAYASHI
Gold prices rose on Friday as risk aversion swept across financial markets after media reports about explosions in Iran, prompting fears of a wider regional conflict and increasing bullion's safe-haven appeal.
Spot gold rose 0.3% at $2,386.05 per ounce, as of 4.29 GMT, after briefly jumping as high as $2,417.59 earlier in the session, not far from an all-time high of $2,431.29 hit last Friday. Bullion was set for a fifth straight weekly rise and has risen about 2% so far this week.
US gold futures rose 0.1% at $2,401.20.
The news of Israel's attacks on Iran today "is driving gold price attention on the Middle East, which has been the sole thing keeping the gold price moving higher for weeks. Market is waiting for more information about the nature of the attack, and what the response would be," said Kyle Rodda, a financial market analyst at Capital.com.
"Gold is not a monetary policy trade at the moment, it's a geopolitics trade."
Israel has attacked Iran, three people familiar with the matter said, as Iranian state media reported early on Friday that its forces had destroyed drones days after Iran launched a retaliatory drone strike on Israel.
Israel attacks Iran, sources say, drones reported over Isfahan
Eventually, even if geopolitical risks subside, "Chinese gold reserve accumulation acts as the major catalyst. That is a process that seems to have scope for continuity, favouring gold's upside bias," said Ilya Spivak, head of global macro at Tastylive.
Meanwhile, Federal Reserve policymakers have gathered around the idea of keeping borrowing costs where they are until perhaps well into the year, given the slow and bumpy progress on inflation and a still-strong US economy.
Higher interest rates increase the opportunity cost of holding non-yielding bullion.
Among other precious metals, spot silver rose 0.2% to $28.28 per ounce, and was set for a weekly gain.
Spot platinum rose 0.6% at $938.39, and palladium was steady at $1,023.09. Both sister metals were headed for a weekly decline.
Reuters
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