Gold firms on renewed U.S.-Iran tensions, eyes fifth weekly gain

Gold edged higher on Friday, and was on

track to post a weekly gain for fifth straight week, as fresh

sanctions on Iran by the United States stoked uncertainty

supporting demand for the bullion.

The targets of the sanctions included Iran’s manufacturing,

mining and textile sectors as well as senior Iranian officials

who Washington said were involved in the Jan. 8 attack on

military bases housing U.S. troops.

Spot gold rose 0.4% to $1,557.86 per ounce by 2:12

p.m. EST (1912 GMT) and was up about 0.4% for the week.

U.S. gold futures settled up 0.4% at $1,560.1 per


“The main catalyst for gold prices is the dialog that’s

taking place over Iran and weather or not we are going to see an

acceleration of the conflict… The instability over that is

causing all the volatility,” said Jeffrey Sica, founder of

Circle Squared Alternative Investments.

With the sanctions its becoming obvious that there is going

to be even economic consequences, Sica added.

Gold, often considered a safe investment during political

and economic turmoil, surged above $1,600 on Wednesday after

Iran launched missile strikes on U.S. forces in retaliation for

the killing of its top commander in a drone attack.

However, prices retreated 4% after the two sides softened

their stance.

“The pullback that we saw the last couple of days gave

people an opportunity to buy today,” said Michael Matousek, head

trader at U.S. Global Investors.

“There’s some resistance at $1,562 but if it trades up

through there, that’s going to be a key level to where

short-term traders are going to be involved.”

Meanwhile, data from the U.S. Labor Department showed job

growth slowed more than expected in December helping prop up the

bullion further.

The U.S. dollar also fell from four-week highs against the

safe-haven yen and slid versus the Swiss franc on the

possibility of renewed tensions in the Middle East.

Holdings of the world’s largest gold-backed exchange-traded

fund, SPDR Gold Trust , fell for the second straight

session on Thursday.

Elsewhere, palladium was up 0.4% at $2,115.88 per

ounce, having hit a record peak of $2,149.50 in the previous

session on supply constraints. The metal was still on track for

its biggest weekly rise since mid-June, up more than 6% so far.

Silver was up 0.9% at $18.06 per ounce.

Platinum gained 1.3% to $978.48 per ounce but was

down 0.2% for the week so far.

(Reporting by Eileen Soreng in Bengaluru

Editing by Matthew Lewis and Marguerita Choy)

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