By: Economy Middle east

Gold prices continued their ascent on Friday and were on track to post solid gains for February, supported by heightened geopolitical tensions and ongoing economic uncertainty that boosted demand for safe-haven assets.

Uncertainty surrounding U.S. trade policy, coupled with worries about slowing growth in the world’s largest economies, continued to drive investors toward safer investments, allowing bullion to recover most of its losses from late January.

As of 5:20 GMT, spot gold climbed 0.18 percent to $5,186.58 per ounce, while U.S. gold futures for April delivery increased 0.18 percent to $5,203.70 per ounce.

In the UAE, gold rates marked a notable increase, with 24-carat gold rising AED2.25 to AED624.5 and 22-carat gold gaining AED2 to AED578.25. Additionally, 21-carat gold rose AED2 to AED554.5 and 18-carat gold edged up AED1.75 to AED475.25.

Meanwhile, 14-carat gold rose AED1.25 to AED370.75.

Gold climbs over 6 percent in February

Gold prices were on track for a seventh consecutive month of advances, climbing over 6 percent in February as uncertainty surrounding U.S. tariffs and escalating tensions between the United States and Iran strengthened its appeal as a safe-haven asset.

Rising geopolitical strain linked to Iran played a central role in the rally, with Washington sending additional naval forces to the Middle East and warning of possible military action if Tehran refused a nuclear agreement.

Negotiations between the two countries ended this week without a deal. However, both parties agreed to continue discussions in the coming weeks, raising cautious hopes that a nuclear accord could eventually be reached.

Concerns about the U.S. economic outlook also supported gold prices, particularly after the U.S. Supreme Court invalidated most of President Donald Trump’s trade tariffs.

In response, Trump introduced new tariffs under an alternative legal basis and signaled the possibility of further levies, maintaining market anxiety about additional economic strain stemming from trade measures.

Decline in U.S. Treasury yields supports gold

On Friday, a decline in U.S. Treasury yields reduced the opportunity cost of holding gold, helping counterbalance the strength of the dollar and tentative signs of progress in U.S.-Iran negotiations.

The benchmark 10-year yield slipped to a three-month low, while the dollar was poised to post a 0.6 percent monthly gain, supported by expectations of a more hawkish Federal Reserve. A stronger dollar makes gold prices, which are priced in dollars, more expensive for investors using other currencies.

At the same time, the likelihood of early interest rate cuts under Fed Chair nominee Kevin Warsh, moves that would align with President Donald Trump’s preferences, appeared to diminish amid growing optimism about the U.S. economic outlook. Data showed that new applications for U.S. unemployment benefits edged up slightly last week, though the jobless rate seemed to remain stable in February, reflecting continued resilience in the labor market.

According to CME’s FedWatch Tool, markets are currently pricing in three quarter-point interest rate cuts from the Federal Reserve this year.

Other precious metals

As gold prices rose, the broader precious metals market witnessed upward movement on Friday. Spot silver climbed 1.63 percent to $89.79 per ounce and was on track to record a 6.1 percent monthly increase. Meanwhile, spot platinum surged 4.98 percent to $2,385.30 per ounce, while palladium advanced 2.53 percent to $1,829.84 per ounce.