Gold soared to a new all-time high on Friday, buoyed by rising tensions in the Middle East and a weaker dollar, and cemented market confidence that policymakers would move to reduce interest rates in September.
Gold hit $2,492 per ounce in early Friday trading – besting the July 17 record of $2,482 per ounce – before settling back down to around $2,485 per ounce. The yellow metal is already on track for a 2.5% gain on the week. Silver, meanwhile, was fighting to stay in positive territory and traded down $0.9 at $28.27 per ounce.
Signs that gold was going to have a breakout week began on Monday, as it notched its highest session since Aug. 2, when the release of a lackluster jobs report revealing a rise in unemployment to 4.3% sent shockwaves through Wall Street and global markets. A widespread sell-off carried into last week as recession fears sent stocks tumbling and thrashed precious metals.
Gold prices eased in the middle of the week on profit-taking, a firmer dollar, and higher Treasury yields before again picking up steam. The precious metal closed Thursday’s session at $2,457 per ounce.
A weaker dollar and escalating tensions in the Israeli-Palestinian conflict in the Middle East on Friday helped boost gold’s safe haven appeal, as investors sought the metal’s appeal as a hedge against geopolitical uncertainty.
Ceasefire negotiations continued Friday in Qatar as the Middle East braced for retaliation against Israel by Iran and its allies that threatened to expand the conflict in the region. Additionally, the Israeli army on Friday ordered an evacuation for sections in southern and central Gaza that had been designated as a humanitarian zone on Israeli claims that Hamas was using the area to stage attacks against the country.
“Gold surged to a fresh all-time high after two weeks of extremely choppy trading as bulls finally impose their will,” New York-based independent metals trader Tai Wong told Reuters on Friday.
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