Gold jumped more than 2% and was set for its best week in seven months on Friday, as conflict in the Middle East lifted safe-haven demand for the metal, combined with expectations that the U.S. interest rates may have peaked.
Spot gold rose 2.1% to $1 907.30 per ounce by 9:22 a.m. ET (1322 GMT). US gold futures added 2% to $1 921.20. Prices were up 4.1% for the week.
Expectations of an escalation in the conflict between Israel and Islamist group Hamas is mainly pressuring yields and driving gold prices higher, said David Meger, director of metals trading at High Ridge Futures.
Israel called for all civilians in the northern half of the Gaza Strip to relocate south within 24 hours, as it amassed tanks for an expected ground assault in response to an attack by Hamas.
Gold is considered a safe investment during times of geopolitical and economic turmoil.
"Despite yesterday's warmer than expected inflation report, currently there is an expectation that Fed will not hike rates in the November meeting, which is also helping prices,"
U.S. Treasury yields and the dollar fell, having strengthened in the last session after data showed U.S. consumer prices increased in September. USD/US/
Traders currently see around a 67% chance of the Fed leaving interest rates unchanged this year, according to the CME Fedwatch tool.
In the physical gold market, a rebound in domestic prices dulled activity in India, while premiums in China retreated further from recent highs. GOL/AS
Spot silver XAG= climbed 2.5% to $22.39 per ounce as it looked set for its first weekly gain in three.
Platinum XPT= rose 1% to $877.48 and palladium XPD= dropped 1.2% to $1,131.04, both on path for weekly declines.
"We now expect it (palladium) to recover only slightly to $1,300 by the middle of next year and to $1,400 by the end of 2024," Commerzbank wrote in a note.