Gold prices rose on Friday, rebounding from a sharp drop in the previous session on the back of a global stock market decline and prolonged tensions between the US and Iran, but CME Group raised margins on the precious metal to counter risks.
By 0923 GMT, spot gold was up 1.9% at $4,859.43 an ounce, while U.S. gold futures for April delivery were down 0.1% at $4,883.10 an ounce.
“We’re seeing some safe-haven investment coming in, but keep in mind there’s still some caution after last Friday’s selloff. Concerns over tensions between Iran and the U.S. remain,” said Kelvin Wong, senior market analyst at OANDA.
“Gold price movements will be volatile in the very short term between the key near-term resistance at $5,169 and the key short-term support at the $4,400 level.”
Iran and the United States began high-stakes negotiations in Oman on Friday over Tehran’s nuclear program.
Wall Street’s global stock sell-off spilled over into Asia on Friday, with many regional benchmarks in the red.
Gold, a traditional safe-haven asset, performs well in times of geopolitical and economic uncertainty. Spot silver rose 4.2% on the day to $74.22 per ounce after falling below the $65 per ounce level in early trading in Asia.
Gold fell 0.1% for the week, and silver fell more than 12% after falling 18% last week, its biggest weekly decline since 2011. The U.S. dollar hovered near a two-week high this week, weighing on precious metals after President Donald Trump named Kevin Warsh as the next Federal Reserve Chairman last week.
Meanwhile, CME Group said on Thursday the exchange operator increased margin requirements for gold and silver futures contracts (the third increase in the past two weeks) in an effort to limit risks from increased volatility in precious metals markets.
India’s gold premium also halved this week from multi-decade highs as price volatility deterred buyers.
January’s U.S. nonfarm payrolls report has been postponed from Friday to Feb. 11 as the four-day partial government shutdown ends.
Spot platinum rose 0.9% to $2,004.85 an ounce, and palladium rose 2.3% to $1,653.13. Both decreased this week.
(Reporting by Noel John in Bangalore; Editing by Leroy Leo)
