Gold price nears $5,000 as geopolitical worries linger

Gold prices rose on Friday morning, advancing closer to the $5,000 mark, as geopolitical concerns remained in focus for investors.

Gold futures (GC=F) were up 0.6% to $4,940.20 per ounce at the time of writing, while spot gold climbed 0.5% at $4,911.19.

US president Donald Trump’s U-turn on tariff threats over opposition to his proposed takeover of Greenland and talk of a “framework of a future deal” over the semi-autonomous Danish territory, has fuelled a relief rally in stocks.

Read more: Markets calm after tumultuous week at Davos

At the same time, Deutsche Bank (DBK.DE) analysts said in a note on Friday that “there’s still a lot of focus on the precise details of what the framework over Greenland will include, and there was lingering caution [on Thursday] that the geopolitical risk hasn’t entirely gone away”.

Attention will turn to talks between officials from Ukraine, Russia and the US, due to be held in Abu Dhabi on Friday. The meeting will mark the first trilateral talks since Russia invaded Ukraine in 2022.

Oil prices rose on Friday morning, as Trump’s latest comments on Iran fuelled concerns about the potential of tighter supply.

Trump told reporters on board Air Force One on Thursday that the US has an “armada” heading towards Iran.

The president said that the US was moving ships toward Iran “just in case” he wants to take action.

“We have a massive fleet heading in that direction and maybe we won’t have to use it,” he said.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Fresh warnings from President Trump towards Iran revived concerns around supply risks in a key OPEC producer, helping prices recover some lost ground. That move was reinforced by Saudi Aramco pushing back against fears of a global oil glut, pointing to strong demand.”

The pound was steady against the dollar (GBPUSD=X) on Friday morning, trading at $1.3506 at the time of writing, as investors eyed economic data.

In the US, weekly initial jobless claims came in at 200,000 for the week ending January 17, according to data released Thursday. This was lower than the 209,000 expected, according to Deutsche Bank.

Revised US economic growth data, also released Thursday, showed that US gross domestic product (GDP) rose at an annual rate of 4.4% in the third quarter, up from an initial estimate of 4.3%.

In addition, a delayed reading of the Federal Reserve’s preferred inflation gauge came in line with economist expectations. The US Bureau of Economic Analysis on Thursday released a combined measure of the personal consumption expenditures (PCE) index for October and November due to the government shutdown which showed inflation rose 2.8% year-over-year.

Richard Hunter, head of markets at Interactive Investor, said these latest data releases removed “any immediate fears of a slowdown in the US economy, although by the same token it reduces the likelihood further of any corrective action from the Federal Reserve on interest rates.”

Back in the UK, data released on Friday showed that retail sales rose unexpectedly by 0.4% in December, up from a 0.1% fall in November.

Read more: Morgan Stanley upgrades EU chip sector to overweight and highlights top-rated stocks

Meanwhile, the GfK consumer confidence index, also released on Friday, showed a slight rise of one point to minus 16 in January.

Hargreaves Lansdown’s Britzman said: “The latest GfK survey showed confidence edging up again in January, with households feeling noticeably better about their own finances even as views on the wider economy remain gloomy.

“That ‘less bad’ trend is feeding through to spending, with December retail sales beating expectations despite the usual seasonal noise,” he said. “Taken together, the backdrop points to steady, rather than spectacular, consumer growth ahead, underpinned by rising real wages, a more active housing market and gradually falling interest rates.”

In other currency moves, the pound edged 0.2% higher against the euro (GBPEUR=X), to trade at €1.1502 at the time of writing.

More broadly, the FTSE 100 (^FTSE) was up 0.2% in early European trading, at 10,172 points. For more details on market movements check our live coverage here.

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