NEW YORK — Gold prices rose for a second consecutive session on Friday, reaching a one-week high as lower oil prices helped offset pressure from the US Federal Reserve’s indications of tighter monetary policy, according to Reuters.
Spot gold rose 0.9% to $4,378.97 an ounce, while US gold futures gained 0.4% to $4,418.50 an ounce.
Han Tan, chief market analyst at Exinity-owned trading platform Biybit, said the precious metal had largely shrugged off the Fed’s hawkish signals.
“Gold has found near-term relief” from expectations that the Fed’s rate-hiking cycle could be limited, as well as from lower oil prices, Tan said, according to Reuters.
Gold is traditionally viewed as a hedge against inflation. However, higher interest rates can weigh on demand for the non-yielding asset by making interest-bearing investments more attractive.
The Federal Reserve on Wednesday signalled that it could raise interest rates further in the coming months, reinforcing expectations of a prolonged period of tighter monetary policy.
Goldman Sachs said in a note that it expected the impact of tighter policy to be felt mainly through a slower pace of near-term gains in gold prices rather than a significant decline in the metal’s ultimate price level.
Other precious metals also advanced on Friday. Spot silver rose 2.8% to $67.03 an ounce, while platinum gained 2.6% to $1,814.57. Palladium climbed 3.2% to $1,331.95 an ounce.
All four major precious metals were also on track to post weekly gains.
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