Gold prices rose on Friday morning, as tensions between the US and Iran fuelled demand for safe haven assets.
Gold futures (GC=F) were up 0.7%% to $5,031.90 per ounce at the time of writing, while spot gold climbed 0.5% to $5,018.82 an ounce.
US president Donald Trump said on Thursday that Iran must make a deal over its nuclear program, or warned that “bad things” would happen, and suggested a deadline of 10 to 15 days for reaching an agreement.
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ING head of commodities strategy Warren Patterson and commodities strategist Ewa Manthey said: “Markets remain sensitive to US-Iran talks, with lingering uncertainty helping to keep gold well-supported near record levels.”
“The underlying outlook for gold remains constructive,” they said. “Geopolitical risks, expectations of lower interest rates later this year, and continued investor and central‑bank demand are underpinning prices.”
“While volatility is likely to stay elevated around geopolitical headlines, risks remain skewed to the upside, even if gains from here are likely to be more measured than the sharp rally seen previously” Patterson and Manthey added.
5,050.90 +53.50 (+1.07%)
As of 4:37:15 GMT-5. Market open.
Oil prices were steady on Friday morning, though Brent crude remained at its highest point since July, after prices spiked in the previous session amid rising tensions between the US and Iran.
Brent crude (BZ=F) futures were little changed at $71.68 per barrel at the time of writing, while West Texas Intermediate futures (CL=F) stood at $66.41 a barrel.
ING’s Patterson and Manthey said: “The heightened uncertainty that the market faces over the next two weeks suggests that oil prices are likely to continue to price in a large risk premium.”
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“US oil inventory data from the Energy Information Administration (EIA) yesterday would have only provided further support to the oil market, with a bullish release,” they said.
They pointed out that US crude inventories fell by a little more than 9 million barrels over the past week, with exports jumping by 851,000 barrels per day week-on-week, while imports declined by 281,000 barrels a day week-on-week.
“Meanwhile, refined products also saw inventory declines, with gasoline and distillate stocks falling 3.21 million barrels and 4.57 million barrels, respectively,” Patterson and Manthey added.
The pound edged 0.1% lower against the dollar (GBPUSD=X) on Friday morning, to trade at $1.3450 at the time of writing, as investors digested the latest economic data out of the UK.