Gold Prices Soar: Investors Seek Safe-Haven Assets Amid Market Volatility

Gold prices edged higher Friday and are on track for weekly gains, helped by a weaker dollar. But the rally stayed limited after Federal Reserve officials made comments that crushed hopes for interest rate cuts next month.

By 0127 GMT, spot gold climbed 0.2% to $4,180.57 per ounce. The precious metal has gained 4.5% so far this week. But U.S. gold futures for December delivery dropped 0.3% to $4,183.40 per ounce.

The dollar index, which tracks the U.S. currency against major competitors, is heading for its second straight weekly decline. This makes gold more attractive for holders of other currencies since they can buy more with their money when the dollar weakens.

Here's what's happening with gold right now. The metal benefits when the dollar falls because it's priced in dollars globally. So when the dollar drops, gold becomes cheaper for international buyers. But Fed officials have been talking tough about keeping rates higher for longer, which usually hurts gold since the metal doesn't pay interest.

The tension between these two forces - a weak dollar helping gold and Fed hawkishness hurting it - explains why gold's gains stayed modest despite the positive weekly performance.

Other precious metals also moved higher. Silver jumped 0.6% to $52.64 per ounce in spot trading. Platinum gained 0.6% to $1,589.80, and palladium rose 0.6% to $1,435.20.

For investors watching these markets, the key thing to track is what Fed officials say next week. Any hints about their rate plans could swing gold prices significantly. The dollar's direction will also matter since these two often move in opposite directions.