Gold Price News: Gold Rallies to Notch Up 1.9% Weekly Gain

Gold prices powered up through the $2,400 an ounce mark on Friday, capping a strong week for the metal, which posted week-on-week gains of around 1.9%.

Gold prices touched a high of $2,419 an ounce on Friday, compared with around $2,379 an ounce in late trades on Thursday. That was the highest gold price since April 12.

Friday was light on macroeconomic data releases, and gold’s ability to push higher seemingly without the support of underlying economic data does highlight its natural appeal as a safe haven during times of geopolitical tension.

Recently-approved western financial support for Ukraine’s defence against Russian military attacks raises the ante and may indicate a long-drawn out conflict in the region, maintaining a risk of the confrontation spilling out into a wider war. These tensions, along with the ongoing clash between Israel and Hamas, continue to create a risk premium for gold prices.

On the demand side, the People’s Bank of China has announced gold purchases for 18 consecutive months, the World Gold Council said in a report May 15.

Total official gold holdings at the end of April were 2 tonnes higher at 2,246 tonnes, representing 4.9% of the bank’s total reserves – the highest ever, it said.

The latest figures from China build on recent interest in gold among central banks more broadly, amid signs that they are seeking to rebalance portfolios to include a higher weighting for low-risk assets like precious metals.

Looking ahead, the markets will be watching out for speeches by several US Fed officials on Monday and Tuesday, as traders scan for clues about the timing of interest rate cuts.