GOLD prices rose on Friday, rebounding from a more than 1% drop in the previous session, as investors bought safe-haven bullion on heightened uncertainty over a widening Middle East conflict.
Spot gold was up 0.8% at $5,117.27 per ounce, as of 0650 GMT. The metal has lost roughly 3% so far this week and is on course to snap a four-week winning streak on fading interest rate-cut prospects and inflation concerns as global energy prices spike.
U.S. gold futures for April delivery were up 1% at $5,126.70.
The dollar weakened, making greenback-priced bullion less expensive for holders of other currencies.
"Geopolitical risks are still not subsiding. In fact, there could be a risk of escalation, given the fact that the recent interview by Iranian foreign minister stating that the Iranian forces are ready for a ground invasion by the U.S. or even Israel. So that's actually supporting gold price," said Kelvin Wong, a senior market analyst at OANDA.
On the sixth day of the war, Iran launched a series of attacks on Israel, the United Arab Emirates and Qatar.
U.S. Defense Secretary Pete Hegseth and Admiral Brad Cooper, who leads U.S. forces in the Middle East, said that the U.S. has enough munitions to continue its bombardment indefinitely.
The U.S.-Israeli military campaign against Iran launched on Saturday has struck targets across the country and triggered Iranian retaliation.
Bullion, traditionally viewed as a safe-haven asset, has risen about 18% so far this year, notching successive record highs amid heightened geopolitical and economic uncertainty.
Gold prices would be volatile in the near term with key support at $5,040 and resistance at $5,280, Wong said, adding that prices could rise up to $5,448 if the resistance is broken.
Demand for physical gold eased in India this week as volatile prices deterred buyers, while premiums in China held firm on a pickup in investment demand.
CME Group on Thursday cut the initial margin on its COMEX 100 gold futures to 7% from 9%, and reduced the margin on its COMEX 5,000 silver futures to 14% from 18%.
Investors now await the U.S. employment report for February, due later in the day.
Spot silver rose 2.4% to $84.12 per ounce. Spot platinum gained nearly 1.4% to $2,150.70, while palladium climbed 2% to $1,662.72. — Reuters
