Gold Prices Surge as Markets Assess Iran War Developments
Gold prices jumped sharply on Friday, while the U.S. dollar remained relatively stable, as investors evaluated the likelihood of negotiations to end the ongoing Iran conflict.
Spot gold rose 3.0% to $4,510.84 per ounce by 10:58 ET (14:58 GMT), while gold futures also gained 3.0% to $4,542.45 per ounce.
Weekly Gains Despite Recent Volatility
The latest rally put gold on track for a modest weekly gain of around 0.5%, reversing earlier expectations of a weekly decline. However, on a broader scale, the precious metal remains under pressure, having dropped more than 14% over the past month.
Trump Extends Deadline on Iran Energy Threats
U.S. President Donald Trump announced an extension of the deadline for Iran to reopen the Strait of Hormuz, delaying potential U.S. strikes on Iranian energy infrastructure until April 6.
In a post on Truth Social, Trump stated that the extension was requested by Iran and emphasized that ongoing negotiations between Washington and Tehran were progressing positively. He dismissed conflicting media reports as inaccurate.
Previously, Trump had warned that the U.S. would target Iranian power facilities if the key shipping route remained blocked. The Strait of Hormuz is a critical global oil artery, responsible for transporting roughly 20% of the world’s oil supply.
Iranian officials, however, have denied that any direct negotiations with the United States are currently taking place.
Dollar Stability and Its Impact on Gold
Amid the uncertain geopolitical backdrop, the U.S. dollar continued to attract safe-haven demand. The U.S. Dollar Index edged up 0.1% to 99.95 and has gained approximately 2.4% over the past month.
A stronger dollar typically reduces the appeal of gold, as it makes the metal more expensive for investors holding other currencies.
Gold Faces Pressure from Higher Interest Rate Expectations
Rising oil prices — driven by supply disruptions linked to tensions in the Strait of Hormuz — have increased concerns about global inflation.
This has strengthened expectations that central banks may keep interest rates higher for longer. Since gold does not offer yields, it often underperforms in a high interest rate environment.
Additionally, gold’s recent pullback follows a strong rally earlier this year, when prices reached record highs in January. Since then, the metal has corrected by roughly 20%, reducing some of its safe-haven appeal.
