Yahoo Finance Gold Prices Gained on Middle East Tension, Rate Cut Expectations
Investing.com - Gold prices gained on Friday amid intensifying tension in the Middle East and rising expectations of aggressive Fed easing.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange gained 1.1% to $1,443.45 a troy ounce by 12:45 AM ET (04:45 GMT).
Prices of the safe-haven metal were initially under pressure earlier in the day amid strong U.S. data, but rebounded following news that the U.S. military shot down an Iranian drone in the Strait of Hormuz in what President Trump called an act of self-defense.
It was not known if the drone was armed, but a Pentagon spokesman, Jonathan Hoffman, said that it had “closed within a threatening range” before being shot down.
In other news, Federal Reserve President John Williams (NYSE:WMB) said in a speech that the Fed will “act quickly” to support the economy as “it’s better to take preventative measures than to wait for disaster to unfold.”
His speech raised expectations of the Fed to take more aggressive action on policy easing, although the New York Fed clarified later that Williams' speech were not indicative of the central bank’s future moves.
The prospect of lower interest rates benefits gold as it lowers the opportunity cost of holding the non-yielding asset.
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