* Gold sees best week in more than 3 years
* Spot gold up nearly 4% so far this week
* Dollar index headed for a fall of 1% for the week
(Updates prices)
By Eileen Soreng
June 21 (Reuters) - Gold prices climbed to a near six-year
high on Friday, surpassing the key $1,400 level on dovish
signals from major central banks and rising dispute between the
United States and Iran.
Spot gold XAU= was up 0.5% at $1,394.26 per ounce at 1240
GMT, after earlier hitting its highest since Sept. 2013 at
$1,410.78.
U.S. gold futures GCv1 rose 0.2% to $1,399.4 per ounce.
"The Iranian tensions provided the catalyst for gold to inch
above $1,400, after threatening to break above that level since
yesterday's dovish Fed outcome," said Howie Lee, an economist at
OCBC Bank.
"There is a perfect mix of ingredients for gold's rush to
the top – a weak macroeconomic environment, low bond yields,
soft dollar and rising geopolitical tensions."
Iranian officials told Reuters on Friday that Tehran had
received a message from U.S. President Donald Trump through Oman
overnight warning that a U.S. attack on Iran was imminent.
Earlier this week, in a further boost for gold, the U.S.
Federal Reserve joined global peers such as the European Central
Bank and the Bank of Japan with plans to cut interest rates to
support flagging economic growth, hinting at cuts beginning as
early as next month. This prospect has put government bonds on a bullish footing.
The combination of a weaker dollar, falling yields and the
Middle East tensions have lifted gold by nearly 4% so far this
week - its biggest rise since the week ended April 29, 2016.
Since Wednesday, bullion has risen as much as $70.
"Gold should remain in demand as a safe haven and as a store
of value," said Commerzbank analyst Daniel Briesemann.
"However, because the price has also been pushed up by
speculative buying, the higher the price, the more attractive it
is to take profits so we will see some setbacks in the near
future."
Meanwhile, the dollar was set for a weekly loss of more than
1% against major currencies, and U.S. benchmark 10-year Treasury
yields dropped below 2% for the first time in more than 2-1/2
years. USD/ US/
Investors will now focus on whether the United States and
China can resolve their trade row at a Group of 20 leaders
summit in the western Japanese city of Osaka next week.
In the physical market, dealers in India, the second-biggest
global gold consumer after China offered the biggest discounts
in almost three years this week as local prices soared to record
peaks. Elsewhere, silver XAG= fell 0.6% to $15.33 per ounce.
Platinum XPT= was up 0.2% at $804.33 per ounce.
Palladium XPD= climbed 1.2% to $1,495.56 an ounce and was
headed for a third consecutive weekly gain.
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Gold prices climb to multi-year highs after U.S. Fed hints at
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