Rising tensions in the Middle East and increased expectations for a rate cut by the Fed have lifted gold prices to their highest levels in six years. At the time of writing, GOLD is trading at $1,400.

So far, gold has climbed 1.8% higher this week and looks all set for a weekly gain for the second straight week. On the one hand, we heard comments from the New York Fed President John Williams on Thursday, signaling the possibility of more aggressive rate cuts by the Fed to tackle low inflation.

And on the other, tensions continue to rise between US and Iran after the US Navy claimed that it had destroyed an Iranian drone in the Strait of Hormuz. while Iran has so far denied this claim, all eyes will be on this region to see if Iran possibly retaliates to this latest development.

On the trade war front, there were some lukewarm developments after US Treasury Secretary Steven Mnuchin confirmed that a phone call was scheduled with the Chinese team on the sidelines of the G7 meeting. However, with no progress being made, the US-China trade dispute continues to maintain the safe haven appeal of gold in markets.