Gold Gains on Escalating Middle East Tensions

Gold bars are displayed at a gold jewelry shop in the northern Indian city of Chandigarh November 4, 2009. REUTERS/Ajay Verma/File Photo

Gold prices rose on Friday as international strikes on Yemen added to fears of further escalation in the Middle East conflict, pushing up bullion's safe-haven appeal.
Spot gold was up 0.3% at $2,033.89 per ounce, as of 0427 GMT. However, it has fallen 0.6% so far this week.
US gold futures rose nearly 1% to $2,038.00, Reuters reported.
Attention will be focused on heightened geopolitical tensions that are "one notch up in the Middle East, and is supporting gold prices above the 50-day moving average of $2,015," said Kelvin Wong, a senior market analyst for Asia Pacific at OANDA.
The United States and Britain launched strikes against sites linked to the Houthi movement in Yemen.
In wider financial markets, Asian shares were cautious on Friday as the escalating conflict in the Red Sea region sent oil prices surging.
Data on Thursday showed US consumer prices rose more than expected in December, but excluding volatile food and energy costs, the pace of price increases fell to 3.9% from 4% on an annual basis.
Despite hotter headline CPI, core inflation remained muted, sending 10-year Treasury yields below 4%, showing "data is not that hot, helping support gold," Wong said.
Market bets of 150 basis points (bps) of Fed rate cuts this year were undeterred, with traders pricing in a 73% chance that they could begin as soon as March, according to IRPR, LSEG's interest rate probability app. However, Fed officials on Thursday signaled inadequate progress on the inflation front for the central bank to start cutting rates as early as March.
The Fed is expected to hold its policy rate steady at its Jan. 30-31 meeting.
Investors will next look out for US producer prices data, due at 1330 GMT.
Spot silver rose 0.4% to $22.82 per ounce, platinum gained 0.2% to $917.48, and palladium ticked 0.1% higher to $989.29.