Gold heads for eighth weekly gain on strong safe-haven demand

Gold prices held steady below the crucial $4,000-an-ounce level on Friday, set for an eighth consecutive weekly gain, buoyed by lingering geopolitical and economic tensions and increased expectations of further U.S. rate cuts.

Spot gold was flat at $3,974.99 per ounce, as of 0637 GMT, but has climbed 2.2% so far this week. U.S. gold futures for December delivery rose 0.3% to $3,985.8. Silver rose 1.6% to $49.89 per ounce, after touching a record high of $51.22 in the previous session.

"Options markets revealed a rise in volatility alongside downside protection for gold during the final stages of this rally, and it seems a good a time as any for gold bulls to book some profits. Still, I expect any pullback could be limited," City Index senior analyst Matt Simpson said.

Israel's government ratified a ceasefire with Hamas on Friday, clearing the way to suspend hostilities in Gaza within 24 hours and free Israeli hostages held there within 72 hours after that, even as Israeli strikes on the besieged enclave continued.

ANZ analysts said in a note that slowing economic growth, higher inflation, a shifting geopolitical landscape and diversification from U.S. assets and the dollar will keep investment demand and central bank purchases of gold strong, while renewed rate cuts should also support the metal.

Bullion surged past $4,000 per ounce for the first time on Wednesday, reaching a record high of $4,059.05. The non-yielding asset, traditionally considered a hedge during geopolitical and economic uncertainty, has gained about 52% this year.

Its rally has been fuelled by geopolitical tension, robust central bank buying, rising exchange-trade fund inflows, expectations of U.S. rate cuts and tariff-related economic uncertainties.

Minutes from the U.S. Federal Reserve's September meeting, released on Wednesday, showed officials agreed that risks to the job market could justify a rate cut, though they remained cautious due to persistent inflation.

The Fed resumed its rate-cutting cycle in September with a 25-basis-point cut. Traders see a 25-bp cut each in October and December, with a 95% and an 82% chance, respectively. 

Platinum eased 1.4% to $1,596.0 and palladium dropped 2% to $1,386.24.