Gold Prices Surge Amid Global Tensions and Economic Data Watch

Gold prices increased on Friday, driven by U.S.-Iran tensions and diminishing European bond yields. Spot gold rose by 0.7% while gold futures climbed by 1.1%. Investors anticipate U.S. inflation data for insights on Federal Reserve's monetary policy, as geopolitical tensions and economic forecasts influence market sentiments.

Gold prices saw a significant rise on Friday as escalating tensions between the United States and Iran coupled with falling European bond yields prompted investors to turn towards safer assets. The spot gold price was up 0.7% at $5,032.49 an ounce by 0941 GMT, although it was headed for a slight weekly decline of 0.2%. Meanwhile, U.S. gold futures for April rose 1.1% to $5,052.70.

Analysts suggest that the movement in interest rate markets illustrates higher prices in longer European trading which translate to lower yields, thus reducing opportunity costs for gold investments. Key contributors to this trend include speculation over the European Central Bank leadership and rising geopolitical tensions. U.S. President Donald Trump's stern warning to Iran concerning its nuclear program added to the uncertainty, setting a deadline of 10 to 15 days for negotiations.

As all eyes turn to U.S. inflation data due later in the day, which is crucial for evaluating Federal Reserve monetary policy, economists predict a 0.3% rise in core personal consumption expenditure, the central bank's favored inflation measure. Despite ongoing tensions, other metals like silver, platinum, and palladium also experienced gains, setting all for positive weekly results.

(With inputs from agencies.)