January 3, 2020 / 3:27 AM / 21 days ago

PRECIOUS-Gold jumps 1% as Mideast tensions spur safe-haven bid

    * Minutes of Fed's Dec. 10-11 policy meeting due at 1900 GMT
    * SPDR Gold holdings rise to highest since Nov. 29
    * Dollar hits 9-week low against safe-haven yen

 (Adds comments, updates prices)
    By Diptendu Lahiri
    Jan 3 (Reuters) - Gold prices jumped 1% to a four-month high
on Friday as tensions flared in the Middle East after a senior
Iranian military official was killed in a U.S. air strike,
sparking safe-haven bids.
    Iranian Major-General Qassem Soleimani, head of the elite
Quds Force, and top Iraqi militia commander Abu Mahdi
al-Muhandis were killed in the air strike on their convoy at
Baghdad airport.            
    "News from the Middle East along with some technical buying
and a weaker dollar is supporting gold prices today," said
Benjamin Lu, analyst at Phillip Futures.
    Spot gold        hit its highest since Sept. 5 at $1,543.66,
and was up 0.8% at $1,540.80 per ounce by 0733 GMT. U.S. gold
futures        gained about 1% to $1,543.30 per ounce.
    For the week, spot gold has gained about 2%, heading for a
fourth consecutive weekly increase.
    Gold is considered to be a safe investment in times of
political and economic uncertainties.
    Supporting the metal further, the dollar slipped to a
nine-week low against the safe-haven yen on tensions in the
Middle East.       
    "After the recent escalations in geopolitical issues, we see
a resistance level near the $1,575 level for the next week,"
said Jigar Trivedi, a commodities analyst at Anand Rathi Shares
& Stock Brokers in Mumbai.
    "In case, there is profit-booking prices may fall to the
$1,520 level but it is better to be long on gold, as there is a
lot of potential for the metal to rise further."
    Asian shares slipped, erasing early gains on heightening
geopolitical tensions, and boosting the metal's appeal.
                
    Investors now await the minutes of the Federal Reserve's
Dec. 10-11 policy meeting, due at 1900 GMT. Lower interest rates
reduce the opportunity cost of holding non-yielding bullion.
    Indicative of investor sentiment, holdings of the world's
largest gold-backed exchange-traded fund, SPDR Gold Trust      ,
rose 0.23% to 895.30 tonnes on Thursday, its highest since Nov.
29.             
    Among other precious metals, silver        hit a more than
two-month high of $18.25 and was last up 0.8% at $18.17 per
ounce, while platinum        rose 0.4% to $982.66, heading for
about 4% weekly gain. 
    Palladium        climbed 0.3% to $1,964.87, on track for a
more than 3% weekly gain.

 (Reporting by Diptendu Lahiri in Bengaluru; Editing by
Subhranshu Sahu)
  
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