Gold girds for the third weekly advanceGold spiked to five-week high, girding for the biggest weekly advance this year and rise for the third consecutive week, on escalating upheavals in the middle east and inflationary pressures which boosted demand on the metal as safe-haven and inflation hedge.
Spot gold is traded at $1385.94 an ounce after recording a high of $1386.47 and a low of $1382.80, where gold may find the coming resistance at $1400 levels.
The previous session, gold added $9.00 or 0.65% to close at $1383.75, while gold price was setin London at $1379.00 per ounce inclining from $1377.00 during the AM fixing.
The ongoing tensions in the MENA region that spread from Tunisia and Egypt to other countries, Bahrain, Libya, Yemen and Iran, are encouraging the purchase of gold.
In Bahrain, the army was deployed after the strong clashes between police and protesters and in Libya 19 were killed, while in Iran the situation is getting out of the government's control.
Fears that the current geopolitical tensions may cripple oil supplies to Western countries from the oil-rich Middle East pushed oil prices higher; which along with the rise in food prices are increasing risks of inflation.
US data released yesterday showed that CPI soared 0.4% in January, above estimates of 0.3%, while earlier in the week data from China and UK showed incline in inflation levels.
In response to the high inflation, some Asian economies, including China, raised interest rates which add to concerns that growth may be affected in these countries that give a strong boost to global recovery.
Moreover, G-20 leaders will meet this weekend in France to discuss measures to tackle global imbalances, where some pressure may be put on China to appreciate the yuan further which may cause a sell-off in the dollar if china responded to the demands of the world's leading economies.
The US dollar rebounded today as the dollar index, which tracks the dollar movements versus basket of major currencies, rose to 78.04 from the day's opening level at 77.95.
Among other precious metals, platinum inched down to $1837.70 from the day's opening of $1840.50, palladium soared to $845.70 from $843.50 and silver rose to $31.39 from $31.69, as of 08:15 GMT.