Gold prices rose on Friday, moving closer to their 14-month high hit last week, as trade and political turmoils, along with U.S. rate cut expectations propped up the precious metal.
Spot gold was up 0.3% at $1,345.49, as of 0402 GMT, within a striking distance of $1,348.08, its highest since April 19, 2018 touched last week.
Bullion has risen 0.4% so far this week, keeping the yellow metal on track for its fourth consecutive weekly gain.
U.S. gold futures rose 0.4% to $1,349.50 an ounce.
"Concerns around Middle East and potential conflicts are one of the factors. There is also investment drive here with bonds renewing their rally, it appears growth concerns remain," said Michael McCarthy, chief market strategist, CMC Markets.
"Growth concerns and interest rate expectations support gold market. In low growth, highly liquid environment, money has to find a home, it appears a number of investors have concluded that gold would one of those homes."
On Thursday, Washington blamed Iran for attacks on two oil tankers in the Gulf of Oman, where Norwegian-owned Front Altair or the Japanese-owned Kokuka Courageous experienced explosions, forcing crews to abandon ship and leave the vessels adrift in waters.
This coupled with an importunate Sino-U.S. trade conflict pushed investors to the edge, with more than 600 U.S. companies urging President Donald Trump on Thursday to resolve the dispute, saying tariffs hurt American businesses and consumers.
Impact of the long-drawn trade war was also evident on the U.S. labor market, which saw an unexpected rise in the number of Americans filing applications for unemployment over the last week.
Another data showed U.S. import prices fell by the most in five months in May in the latest indication of muted inflation pressures, adding to expectations the Fed will cut rates this year.
This further fuelled expectations of Fed rate cut, pulling short-dated U.S. Treasury yields lower on Thursday, and steepening the yield curve ahead of Friday's retail sales data and the central bank's meeting next week.
"Gold traded higher as its appeal as an alternative investment in times of uncertainty. The yellow metal has risen as the probabilities of a summer interest rate cut by the Fed have increased," Alfonso Esparza, a senior market analyst at OANDA, said in a note.
Among other precious metals, silver gained 0.2% to $14.94 and platinum rose 0.7% to $813.10.
Palladium climbed 0.2% to $1,449.19 after hitting its highest since April 29 at $1,450.39 earlier in the session.
The auto-catalyst metal has gained 6.6% so far this week and is set post its best week since week ending Sept. 21, 2018.