By Eileen Soreng
Aug 27 (Reuters) – Gold prices rose above the key psychological level of $1,800 on Friday, supported by safe-haven demand and a dip in the dollar ahead of a speech by the U.S.
central bank chief that will be scanned for cues on stimulus tapering.
Spot gold rose 0.6% to $1,802.39 per ounce by 0647 GMT. The metal stayed above $1,800 for most of the seven months to February this year, but has failed to sustain any break above that level since then. Prices are, however, up about 1.3% for the week, the biggest weekly gain in over three months.
gold futures rose 0.7% to $1,807.00.
The dollar index website dipped 0.1%, boosting gold’s appeal for holders of other currencies. The greenback was also headed for a weekly decline.
“Safe-haven buying has come from rising geopolitical tensions in Afghanistan. There are some concerns about further escalation there,” ANZ analyst Daniel Hynes said.
forces helping to evacuate Afghans desperate to flee Taliban rule braced for more attacks website after an Islamic State suicide bomber killed 85 people, including 13 U.S. soldiers outside the gates of Kabul airport.
Investors are now waiting for U.S. Federal Reserve Chair Jerome Powell’s remarks at the Jackson Hole, Wyoming, symposium at 1400 GMT for any hints about when the Fed will begin tapering its asset purchasing programme.
“What we are looking for here is not a policy change … The Fed will set the stage for a tapering announcement perhaps next month,” said DailyFX currency strategist Ilya Spivak.
“Gold stands to be the most vulnerable, the dollar stands to benefit the most … Critical support for gold is around $1,750. If that gets taken out, I can see it testing $1,700.”
On Thursday, Fed’s hawkish policymakers urged the Fed to begin paring bond purchases they feel have become ineffective.
Gold is viewed as a hedge against inflation and currency debasement.
Fed’s tapering would tackle both those conditions thereby diminishing gold’s appeal.
Silver rose 0.8% to $23.72 per ounce, headed for its biggest weekly gain since May.
Platinum rose 1.2% to $990.69, while palladium advanced 1.7% to $2,432.60 and was headed for it best weekly performance since June rising nearly 7%.
(Reporting by Eileen Soreng in Bengaluru; Editing by Subhranshu Sahu and Himani Sarkar)