Gold comes within touching distance of critical $1300 handle

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• Precious metal capitalizes on risk aversion.
• Wall Street looks to open sharply lower.
• US Dollar Index float above 98 ahead of critical data.

The XAU/USD pair gained traction on Friday and rose to its highest level in more than two weeks at $1299.30 with the precious metal finding demand as a safe-haven in the risk-off environment. As of writing, the pair was consolidating its daily gains a little above $1296, adding nearly $8 on a daily basis.

U.S. President Trump's decision to start imposing tariffs on Mexican imports starting June 10 and reports of China's Commerce Ministry preparing a list of "foreign entities that conduct straggling efforts on Chinese companies" including U.S. tech-giants such as Google, Apple, and Microsoft caused geopolitical tensions to escalate and forced investors to contiğnue to move away from risk-sensitive assets.

Reflecting the intense flight-to-safety, the 10-year U.S. T-bond yield lost more than 3% on Friday and major global equity indexes suffered heavy losses. With the S&P 500 Futures erasing more than 1% today, Wall Street looks to open the day deep in the negative territory, which could help the pair continue to push higher ahead of the weekend.

In the second half of the day, markets will also be paying close attention to the inflation data from the U.S. The US Dollar Index, which rose to its highest level in a week at 98.28, was last seen down 0.1% on the day at 98.08.

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