Gold Rangebound, Heads for a Small Weekly Gain

SEATTLE (Scrap Monster): Gold prices were stuck in a tight range on Friday after rising to their highest in a week in the previous session as geopolitical tensions supported safe-haven demand and led the metal to be on track for a small weekly gain.

Spot gold was little changed at $2,635.83 per ounce, as of 0622 GMT, trading in a narrow $8 range. Gold has gained about 0.6% so far this week after prices hit their highest since Dec. 18 in the last session.

U.S. gold futures eased 0.1% to $2,650.80.

"We are in a holiday lull so price action is a little dull, with moves perhaps exaggerated by thin liquidity," said Kyle Rodda, financial market analyst at Capital.com.

Gold prices have surged nearly 28% so far this year, reaching a record high of $2,790.15 on Oct. 31, driven by Federal Reserve's substantial rate cuts and escalating geopolitical tensions.

However, the momentum took a hit as the dollar gained strength after Donald Trump's presidential win and the Fed's indication of fewer rate reductions in 2025.

"The (Fed) decision shook the markets' confidence in the number of cuts likely to come next year and that acted as a headwind for gold," Rodda said.

Markets are preparing for major policy shifts, including tariffs, deregulation and tax changes, in 2025 as Trump returns to the White House in January.

Gold is considered a hedge against geopolitical turmoil, but higher rates reduce the non-yielding asset's appeal.

Israel struck multiple Houthi targets in Yemen on Thursday, including the Sanaa International Airport, resulting in at least six deaths, according to the Houthi media.

Meanwhile, Russian air defences downed an Azerbaijan Airlines plane that crashed in Kazakhstan, sources told Reuters on Thursday.

Spot silver rose 0.2% to $29.85 per ounce, palladium added 0.2% to $936.88, and platinum was flat at $924.73. All three metals were headed for weekly gains.

 Courtesy: www.reuters.com