Gold rises as oil prices fall and the dollar retreats

Gold prices rose slightly on Friday, supported by lower oil prices and a declining US dollar, as traders focused on developments in the Middle East and expectations regarding global monetary policy.

By 00:50 GMT, spot gold prices rose 0.3 percent to $4,352.60 per ounce. US December gold futures fell 0.2 percent to $4,391.60.

Oil prices dropped by one percent, while the dollar remained under pressure after falling from its recent highs. A weaker dollar reduces the cost of dollar-denominated goods for holders of other currencies.

The Federal Reserve raised interest rates on Wednesday and hinted at further increases in the coming months.

Although gold is typically viewed as a hedge against inflation, higher interest rates can dampen demand for it as yield-bearing assets become more attractive.

The Bank of England kept interest rates unchanged on Thursday but warned of the possibility of having to raise them.

Data showed that the number of Americans filing new claims for unemployment benefits fell unexpectedly last week, but this decline likely overstates the stability of the labor market. The sudden drop is likely due to fluctuations associated with last week’s Labor Day holiday.

For other precious metals, spot silver rose 0.7 percent to $65.64 per ounce, platinum gained 0.9 percent to $1,785.55, and palladium rose 0.1 percent to $1,292.47.