Gold prices moved lower on Friday and remained on track for a weekly loss as escalating tensions between the United States and Iran boosted oil prices, reinforcing concerns that inflation could remain elevated and delay future interest rate cuts.
Silver and platinum were also heading for weekly declines, while the U.S. dollar steadied after last week’s weakness and crude oil continued to trade at elevated levels.
By 04:46 ET (08:46 GMT), spot gold had fallen 0.6% to $4,101.11 an ounce, while gold futures were down 0.8% at $4,108.90 an ounce. Spot prices have declined approximately 1.8% since the beginning of the week.
Oil Rally Revives Interest Rate Fears
The precious metal came under renewed pressure after U.S. military strikes against Iran pushed oil prices sharply higher.
President Donald Trump declared the ceasefire with Iran over and authorised additional military operations, prompting retaliatory action from Tehran.
Although Axios reported that regional mediators continue efforts to preserve the recent U.S.-Iran memorandum of understanding, uncertainty surrounding the conflict remains elevated.
The rise in crude prices has revived fears that energy-driven inflation could keep the Federal Reserve on a more hawkish path. CME FedWatch data showed that markets have increased expectations for a U.S. rate hike in 2026.
Higher interest rates typically reduce demand for gold because the metal offers no yield, making fixed-income investments comparatively more attractive.
“Gold found some support on expectations of limited escalation in the Middle East conflict. This is despite earlier concerns that a rebound in energy prices could see the Fed keeping interest rates higher for longer to combat stubbornly high inflation,” ANZ analysts wrote in a note.
Despite heightened geopolitical tensions, gold has failed to outperform as a traditional safe-haven asset, with inflation concerns continuing to outweigh defensive buying.
Other Precious Metals Also Weaken
Silver and platinum also ended the week on a weaker note.
Spot silver declined 0.7% to $59.5250 an ounce and has lost more than 4% over the week.
Spot platinum edged 0.1% lower to $1,616.14 an ounce, limiting its weekly decline to around 0.3% and outperforming the broader precious metals complex.
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