Gold inches up on geopolitical strain and Fed caution, but remains headed for weekly dip

Gold prices posted modest gains in Asian trading on Friday, extending momentum from the prior two sessions. Even so, the metal was still positioned for a weekly decline as investors weighed renewed tensions between Washington and Tehran against expectations for upcoming U.S. inflation figures.

Spot gold advanced 0.4% to $5,017.85 per ounce as of 01:17 ET (06:17 GMT), while U.S. gold futures climbed 0.8% to $5,036.5.

Despite a sharp midweek rally fueled by safe-haven flows, bullion is on track to end the week roughly 0.6% lower.

Earlier in the week, prices had softened as optimism surrounding possible diplomatic engagement between the U.S. and Iran reduced demand for defensive assets. Those declines were later partially reversed as geopolitical uncertainty resurfaced.

Trading volumes were muted, with Chinese financial markets closed for Lunar New Year celebrations.

Geopolitical risks support gold; PCE data awaited

Heightened diplomatic tensions between the U.S. and Iran continued to underpin the precious metal.

On Thursday, President Donald Trump warned that Iran must agree to a nuclear deal within 10 to 15 days or face unspecified repercussions, amplifying concerns over potential military escalation that could disrupt Middle Eastern oil supplies and unsettle global markets.

However, gold’s upside was capped by a stronger U.S. dollar and a more hawkish tone in the Federal Reserve’s latest meeting minutes, which dampened expectations for imminent rate cuts.

The U.S. Dollar Index is on course for a gain of more than 1% this week — its strongest weekly rise in months — a development that typically pressures non-interest-bearing assets like gold.

Market participants are now turning their attention to Friday’s release of the U.S. Personal Consumption Expenditures (PCE) Price Index, the inflation metric most closely watched by the Federal Reserve.

Other metals see modest gains

Other precious and industrial metals also moved higher.

Silver added 0.4% to $78.80 per ounce, and platinum rose 0.4% to $2,089.65 per ounce.

Copper prices edged up as well. Benchmark copper futures on the London Metal Exchange gained 0.3% to $12,848.20 per metric ton, while U.S. copper futures were little changed at $5.77 per pound.