Gold at weekly high as oil prices fall

Gold rose on Friday to its highest level in a week, positioning itself for its first weekly gain in four weeks, supported by falling oil prices that eased concerns over persistent inflationary pressures, although a stronger dollar capped the extent of the rally.

Spot gold climbed 0.3% to $4,352.39 per ounce by 15:17 GMT, after hitting its highest level since September 11 earlier in the session. Gold has gained 0.2% so far this week.

Chris Gaffney, head of global markets at Everbank, said that the decline in oil prices is helping to alleviate inflationary pressures, as oil had been the primary driver of annual inflation.

He added that precious metals investors had been expecting interest rate hikes in the United States, which led them to build short positions to capitalize on an anticipated downturn in gold prices.

Oil prices fell for the third consecutive day, as the easing of concerns over disruptions to Saudi supply outweighed worries about the widening conflict in the Middle East.

The dollar rose to its highest level in more than seven weeks, making gold, priced in U.S. dollars, more expensive for holders of other currencies.

Although gold is typically viewed as a hedge against inflation, high interest rates can dampen demand for it, as they enhance the appeal of yield-bearing assets.

For other precious metals, spot silver rose 1.8% to $66.37 per ounce, platinum climbed 1.7% to $1,798.30, and palladium increased by 1% to $1,303.46. All three metals are on track for weekly gains.