PRECIOUS-Gold eyes eighth weekly gain on safe-haven rush; silver hovers near record

By Anmol Choubey

Oct 10 (Reuters) - Gold rebounded from earlier losses on Friday and was on track for an eighth consecutive weekly gain, driven by broad political and economic uncertainty and expectations of further U.S. rate cuts, while silver hovered near a record high.

Spot gold XAU=, which hit a record high of $4,059.05 on Wednesday, was up 0.6% at $3,998.02 per ounce as of 1112 GMT - a gain of 2.9% so far this week. U.S. gold futures GCcv1 for December delivery rose 1% to $4,012.30.

Non-yielding bullion is traditionally considered a hedge during times of broader uncertainty.

"Gold is no longer just a defensive asset — it's becoming an offensive one. In this environment, it stands as the strongest alternative to the dollar and a true measure of trust in the global financial system," said Alex Ebkarian, COO at Allegiance Gold, adding that gold is in a secular bull market for the next five years.

Multiple factors were supporting the rally, including geopolitical risks, robust central bank buying, exchange-traded fund inflows, expectations of U.S. rate cuts, and trade-related uncertainties.

Silver XAG= rose 2.6% to $50.40 per ounce a day after touching a record high of $51.22. It has gained 74% so far this year.

"Given the increase in lease rates, a pronounced backwardation curve, and lack of liquidity in London OTC, one should anticipate greater volatility for silver," said Hugo Pascal, a precious metals trader at InProved.

Backwardation is when a commodity's spot price is higher than its future price.

"If contango (the opposite of backwardation) returns and stress eases, a short pullback could emerge (in silver) — and that may prove to be the next great buying opportunity," Ebkarian said.

The U.S. dollar index .DXY fell 0.2%, making greenback-priced bullion cheaper for overseas buyers.

Meanwhile, minutes from the U.S. Federal Reserve's September meeting revealed policymakers were open to rate cuts to address labour market risks, though inflation concerns persisted.

Israel's government ratified a ceasefire with the Palestinian militant group Hamas on Friday.

In other metals, platinum XPT= was up 0.7% to $1,629.49 and palladium XPD= gained 3% to $1,454.59. Both these metals were headed for weekly gains.

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