The gold price stayed afloat above $1,200 although it has fallen from the 3-week high seen on Thursday.
The buying in gold was thought to have been inspired by safe-haven seekers as tensions escalated in the Middle East following Saudi Arabia initiated military action on rebel-held areas in Yemen.
“Gold rose with crude oil in early trading from what we suspect was ‘safe-haven’ inspired buying…gold hisorically rallies during bouts of rising geopolitical tensions but these gains tend to be very fast moving and can be easily given back once the market shifts its focus away from the issues,” said analyst James Steel from HSBC Securities.
Spot gold price was last seen at $1,202 per ounce, just a dollar lower from where it closed yesterday. On Thursday it peaked at $1,219.90, its highest since March 2. Silver is two cents lower at $17.05 per ounce.
Gold was up overnight despite gains in the greenback – the dollar which saw recent sharp falls also started to rebuild gains, with the recent high in the euro prompting traders to re-establish long positions. The dollar index ended the day higher at 97.35 from 96.93
Supporting the gains was weekly unemployment claims at 282,000, better than the forecast 291,000, as was the flash services PMI at 58.6 against consensus at 57.2, the sharpest increase in business activity in the sector since September 2014.
The US fourth-quarter GDP figure, which is expected to be revised higher, is due today.
The PGMs pared back some gains this morning, with platinum $4 lower at $1,148 and palladium slipping $6 to $764 per ounce.
The post Gold price consolidates, geopolitical tension prompts safe-haven buying appeared first on The Bullion Desk.
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