Gold Posts Seventh Consecutive Month Gains
Gold prices rose to near a one-month high on Friday, February 27, posting their seventh straight monthly gain, supported by geopolitical tensions following the extension of nuclear talks between the United States and Iran. The precious metal also received a boost from declining U.S. Treasury yields.
Spot gold climbed 0.8% to $5,230.56 an ounce, having earlier reached its highest level since January 30. It has risen 7.6% so far in February.
U.S. gold futures for April delivery settled 1% higher at $5,247.90.
"There's a lot of geopolitical tension surrounding it," said Phillip Streible, senior market strategist at Blue Line Futures. "All the ingredients are there for a high probability of military action over the weekend, so there's a risk aversion and a rush to safe havens." Oman, which is mediating the talks, said the United States and Iran made progress on Thursday regarding Tehran's nuclear program, but hours of negotiations ended without a breakthrough that could avert potential US attacks amid a large military buildup.
The US Embassy in Jerusalem authorized the departure of non-essential staff and their families from Israel, citing security risks.
Yields on the benchmark 10-year US Treasury note fell to a three-month low on Thursday, reducing the opportunity cost of holding the precious metal.
Stribble said the next target for gold is likely $5,450, with key support near $5,120.
Data showed that US producer prices rose more than expected in January, suggesting that inflation could rise in the coming months.
The CME Group's FedWatch tool indicates that markets are pricing in a roughly 42% probability of the US Federal Reserve cutting interest rates by 25 basis points in June.
As for other precious metals, spot silver rose 6% to $93.67 an ounce, on track for a monthly gain of 10.3%.
