Gold prices hit a near two-month high on Friday

Gold prices climbed on Friday to their highest levels in nearly two months, and were on track for a weekly gain.

Spot gold was up 1.2 per cent at $3,423.30 an ounce, as of 0544 GMT, after hitting its highest since April 22 earlier in the session. Bullion has gained more than 3.4 per cent so far this week.

US gold futures gained 1.2 per cent to $3,444.50.

“Gold surged past resistance around $3,400 on news of the airstrikes, and further upside could be in-store should the escalation continue,” Waterer said.

Signaling a cooling US labour market and subdued inflation pressures, new applications for unemployment benefits held at an eight-month high last week, while slowing domestic demand helped restrain producer prices in May.

The data, released a day after the labour Department reported a moderate rise in consumer prices in May, bolstered expectations of an earlier rate cut.

Traders are now expecting a Federal Reserve interest rate cut of 55 basis points by the year-end, starting in September rather than October as previously anticipated.

Elsewhere, spot silver fell 0.3 per cent at $36.25 per ounce, platinum lost 1 per cent at $1,282.55 and palladium shed 0.5 per cent to $1,050.61. All three metals were set for weekly gains.

Meanwhile Indian gold futures rose above the psychologically important Rs100,000 ($1,161.02) per 10 grams mark for the first time ever on Friday morning, on a weak rupee and tracking gains in overseas markets, dealer said.

Reuters