Gold and silver prices simultaneously increased as the US strengthening deployment of military forces in the Middle East made the global market tense, prompting a part of investors to seek safe haven assets.
Gold prices rebounded, surpassing the $5,200/ounce mark, closing a month of strong price increases. According to Oman, the mediating country, Washington and Tehran will continue negotiations next week after reaching "significant progress" in the negotiation round held on Thursday. However, a source familiar with the US position said that US officials left the negotiating table with disappointment about the actual progress.
The UN nuclear inspectorate said Iran is conducting regular but unclear activities at uranium enrichment facilities that have been airstriked, a factor that could further complicate negotiations between Tehran and Washington regarding Iran's nuclear program.
The US and Iran have fallen into a state of prolonged tense confrontation surrounding the nuclear activities of the Islamic Republic, continuously warning each other, while President Donald Trump has ordered the deployment of the largest US military force in the Middle East since 2003. This development has contributed to supporting the upward momentum of gold prices in recent days.
Since the beginning of the year, gold prices have increased by more than 20%, regaining a solid position above the 5,000 USD/ounce mark after a sharp correction from the historical peak set at the end of January.
This precious metal recorded its seventh consecutive month of price increase, the longest streak of increases since 1973. Factors such as geopolitical tensions, global trade instability, the trend of the USD depreciating and concerns about the independence of the US Federal Reserve continue to add momentum to the multi-year upward trend of gold.
As the market gradually stabilized, investors also increased holdings in gold-guaranteed ETF funds. Capital inflows this week as of Thursday have surpassed previous months' recorded selling volume.
Gold prices were hardly affected by a report released on Friday showing that input prices that US producers have to pay increased higher than forecast. The PPI producer price index increased by 0.5%, while the basic inflation measure excluding food and energy recorded the strongest increase since July. Positive economic data further reinforces the possibility that the US Federal Reserve will not rush to cut interest rates in the near future.
In this afternoon's trading session, spot gold prices increased by 1.5% to 5,278.11 USD/ounce. Silver prices increased sharply by 6.2% to 93.80 USD/ounce. Platinum and palladium also simultaneously went up. The Bloomberg Dollar Spot index, a measure of the strength of the USD, fell slightly by less than 0.1%.
