Gold climbs close to 14-month high

On Thursday, Washington blamed Iran for attacks on two oil tankers in the Gulf of Oman, where Norwegian-owned Front Altair and the Japanese-owned Kokuka Courageous experienced explosions, forcing crews to abandon ship and leave the vessels adrift in waters.

This coupled with an importunate China-US trade conflict pushed investors to the edge, with more than 600 US companies urging President Donald Trump on Thursday to resolve the dispute, saying tariffs hurt US businesses and consumers.

Impact of the long-drawn trade war was also evident on the US labour market, which saw an unexpected rise in the number of Americans filing applications for unemployment over the past week.

Other data showed US import prices fell by the most in five months in May in the latest indication of muted inflation pressures, adding to expectations the Fed will cut rates this year.

This further fuelled expectations of a Fed rate cut, pulling short-dated US Treasury yields lower on Thursday, and steepening the yield curve ahead of Friday’s retail sales data and the central bank’s meeting next week.

“Gold traded higher as its appeal as an alternative investment in times of uncertainty. The yellow metal has risen as the probabilities of a summer interest rate cut by the Fed have increased,” Alfonso Esparza, a senior market analyst at Oanda, said in a note.

Among other precious metals, silver gained 0.2% to $14.94 and platinum rose 0.7% to $813.10.

Palladium climbed 0.2% to $1,449.19 after hitting its highest since April 29 at $1,450.39 earlier in the session.

The auto-catalyst metal has gained 6.6% so far this week and is set to post its best week since week ending September 21 2018. 

Reuters