Gold Futures End Sharply Higher On Rising Geopolitical Tensions

(RTTNews) - Gold prices rose sharply and hit a four-month high on Friday as the demand for the safe-haven asset increased due to an escalation in geopolitical tensions following a U.S. airstrike killing Iranian military leader Qassem Soleimani.

The U.S. Department of Defense said in a statement that it had killed Qassem Soleimani, who it alleged was behind the recent attacks on the U.S. embassy in Baghdad. The Department of Defense also said that the "strike was aimed at deterring future Iranian attack plans."

Iranian leader Ayatollah Ali Khamenei said there would be "revenge" for Soleimani's death.

The dollar index, which opened higher Friday morning, extending gains from previous session, gradually lost ground and slipped into negative territory to 96.71. The index has now recovered to 96.84, down slightly from previous close.

Gold futures for February ended up $24.30, or about 1.6%, at $1,552.40 an ounce, the best settlement since early September.

On Thursday, gold futures ended up $5.00, or about 0.3%, at $1,528.10 an ounce. Gold futures gained 2.3% in the week, after having moved up by about 2.5% a week earlier.

Silver futures for March ended up $0.105 at $18.151 an ounce, while Copper futures for March settled at $2.7870 per pound, down $0.0380 from previous close.

In U.S. economic news, the Institute for Supply Management released a report showing U.S. manufacturing activity unexpectedly contracted at a faster rate in the month of December.

The ISM said its purchasing managers index slid to 47.2 in December from 48.1 in November, with a reading below 50 indicating a contraction in manufacturing activity. Economists had expected the reading to come in at 49.0.

With the unexpected drop, the index pointed to the fastest rate of contraction in manufacturing activity since June of 2009.