Investing.com-- Gold prices rose on Friday and were just shy of the key $2,000 an ounce level as reports that the U.S. military struck Iran-linked targets in Syria spurred a renewed rush for safe haven assets.
The strikes, which were on two facilities in Eastern Syria, were in retaliation for recent attacks on U.S. troops in Iraq and Syria, the Pentagon said on Thursday. The Pentagon also said that attacks on U.S. troops had increased since the onset of the Israel-Hamas conflict earlier this month.
The news pushed up concerns over a broader escalation in the Middle Eastern conflict, which could potentially draw in more Arab powers. This in turn spurred a rush into conventional safe havens.
Fears of an escalation in the Israel-Hamas war have been a key driver of gold gains this month, putting the yellow metal at an over five-month high earlier in October.
Spot gold rose 0.2% to $1,989.49 an ounce, while gold futures expiring in December rose 0.1% to $1,999.0 an ounce by 00:47 ET (04:47 GMT). Both instruments were trading marginally higher for the week.
Fed meeting, inflation data in focus
But further gains in the yellow metal were held back by strength in the dollar and Treasury yields, as markets positioned for a Federal Reserve meeting next week.
While the central bank is widely expected to hold interest rates steady, it is also expected to reiterate its plans to keep rates higher for longer.
But before that, a reading on the personal consumption expenditures index- the Fed’s preferred inflation gauge- is due later on Friday. Any signs of sticky U.S. inflation gives the Fed more impetus to keep rates higher, which in turn bodes poorly for non-yielding assets such as gold.
Signs of resilience in the U.S. economy, following stronger-than-expected U.S. gross domestic product data for the third quarter, also give the Fed more headroom to keep rates higher.
The dollar steadied on Friday, and was set to add 0.4% this week.
Copper prices rise as China trends improve
Among industrial metals, copper prices rose slightly on Friday, extending a recovery from over five-month lows as data showed some improvement in the Chinese economy.
Copper futures rose 0.3% to $3.6022 a pound, and were also up 1.1% for the week.
Data on Friday showed that China’s industrial profits improved marginally in the year to September, falling 9% in the period after a 11% decline in the year to August.
Copper prices were also encouraged by better-than-expected third quarter U.S. GDP data.