FX.co ★ Gold Supported by Safe-Haven Demand

Gold traded steady near $4,150 per ounce on Friday, holding its gains from the previous session as a sharp selloff in equities boosted safe-haven demand for government bonds and precious metals. The rotation into safer assets drove bond yields notably lower, easing pressure on non-yielding assets such as gold.

Investors also monitored rising geopolitical tensions in the Middle East, amid intensifying hostilities between Saudi Arabia and Iran-backed Houthi forces in Yemen. Sentiment was further unsettled after a Singapore-flagged container ship was sunk in the Strait of Hormuz this week by an Iranian projectile.

At the same time, market participants continued to assess the Federal Reserve’s policy path. Stronger-than-expected US economic data have reinforced expectations of additional interest rate increases. Futures pricing suggests about a 72% probability that the Fed will keep rates unchanged at its upcoming meeting, while the implied likelihood of a rate hike in December has risen to 92%.