By Brijesh Patel
(Reuters) – Gold jumped 1% on Friday, helped by a weaker dollar and safe-haven buying after United Auto Workers union kicked of strikes at three automakers in Detroit, while hopes around a likely pause in U.S. interest-rate hikes lent further support.
Spot gold was up 0.7% at $1,924.27 per ounce by 1:56 p.m. EDT (1756 GMT). Bullion has risen 0.3% so far this week.
U.S. gold futures settled 0.7% higher at $1,946.2 per ounce.
The dollar slipped 0.2% against its rivals following U.S. data earlier in the day, making gold less expensive for other currency holders.
“Gold and silver are rallying on a wall of worry,” said Tai Wong, a New York-based independent metals trader.
United Auto Workers union launched simultaneous strikes at three factories owned by the “Detroit Three”, including Chrysler-owner Stellantis, marking the most ambitious U.S. industrial labor action in decades.
“The UAW strike looks like it could last some time given what the union is demanding. And the possible govt. shutdown at the end of the month is getting more press,” Wong said.
Gold is often used as a safe store of value during times of political and financial uncertainty.
Market participants now look forward to more clarity on interest rate outlook from the U.S. Federal Reserve at their policy meeting next week, in which the central bank is widely expected to leave interest rates unchanged.
“If the Fed lean a little bit more dovish next week, that would be significant and cause a rally in the gold market,” said Jim Wyckoff, senior market analyst at Kitco.
Meanwhile, China’s physical gold premiums soared to a new high this week, amid strong demand to shore up a depreciating yuan and a lack of fresh import quotas. [GOL/AS]
Elsewhere, silver rose 1.9% to $23.07 per ounce, platinum gained 2.2% to $926.55 and palladium eased 0.3% at $1,247.35. All three metals were heading for weekly gains.
(Reporting by Harshit Verma and Brijesh Patel in Bengaluru; Editing by Krishna Chandra Eluri)