Spot Gold gained for a third straight trading day on Friday, but was on course for a weekly loss as the US Dollar held in proximity to a 1-month high.
Geopolitical tensions between the US and Iran persisted, underpinning safe-haven assets.
Yesterday US President Donald Trump warned Iran that it must secure a deal over its nuclear program or “really bad things” will happen.
“Precious metals are still very much in the minds of a lot of investors and they’re still looking to buy when prices are lower,” Brian Lan, Managing Director of GoldSilver Central, was quoted as saying by Reuters.
“Central banks will continue to look at gold as an asset class to hold,” Lan said.
Focus now sets on the US PCE inflation report, which may provide more clues on the Federal Reserve’s monetary policy trajectory.
The minutes from the Federal Reserve’s January meeting showed that FOMC officials were divided over the future trajectory of interest rates. Several policy makers signaled that further rate cuts would likely be appropriate in case inflation continued to subside in line with their projections.
Others said that it might be prudent to keep the policy rate on hold for some time. Some FOMC members even argued that rate hikes could become necessary in case inflation remained elevated.
Investors are currently expecting the first rate cut by the Fed for this year to occur in June.
Lower interest rates tend to reduce the opportunity cost of holding Gold, which pays no interest.
Spot Gold was last up 0.60% on the day to trade at $5,026.35 per troy ounce.
The precious metal has retreated 0.38% so far this week.
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