Gold stabilizes amid inflationary risk fueling safe haven appeal

The gold price It advanced on Friday as accelerating inflation boosted its appeal as a safe haven, although a stronger dollar and expectations that central banks will raise interest rates kept it on track for its first weekly decline in the last three.

At 09:56 GMT, spot gold was up 0.1% to $ 1,860.20 an ounce, while US gold futures were up 0.2% to $ 1,864.30.

The dollar was about to close its fourth week on the rise, making gold more expensive for holders of other currencies, as traders bet on a faster rise in rates.

The higher rates translate into a higher opportunity cost of owning the gold metal, which bears no interest.

Authorities at the Federal Reserve (Fed) are pointing to the possibility of rate hikes sooner than they thought would be necessary a few months ago.

“The Fed’s announcement of a rate hike sometime next year is negative for gold, (but) there is still a lot of uncertainty, a lot of concern about inflation to help maintain gold support in this environment.”Said Giovanni Staunovo, an analyst at UBS.

The potential for inflation to continue accelerating could push gold to move above $ 1,900 an ounce, he added.

In other precious metals, spot silver was up 0.1% to $ 24.81 an ounce; platinum was down 0.1% at $ 1,046.94; and palladium was down 0.6% at $ 2,120.19.

With information from Reuters