Gold Prices Fall as Oil Rally Revives Inflation Fears
Gold prices moved lower on Friday and were heading toward a weekly loss as rising oil prices and escalating tensions between the United States and Iran increased concerns about persistent inflation.
Investors fear that stronger energy prices could force the Federal Reserve to keep interest rates higher for longer or even adopt a more restrictive policy stance.
Spot gold fell around 0.6% to $4,100.34 per ounce. Meanwhile, U.S. gold futures declined 0.8% to $4,108.90 per ounce by 09:46 ET, or 13:46 GMT.
Gold was also down approximately 2% for the week.
U.S.-Iran Conflict Weighs on Gold
Gold came under pressure after the United States launched a new series of attacks against Iran, pushing oil prices sharply higher.
U.S. President Donald Trump announced that the ceasefire with Iran had ended and ordered further strikes against the country. Tehran responded with retaliatory measures.
An Axios report indicated that regional mediators were trying to preserve a recent U.S.-Iran memorandum of understanding. However, the outlook for peace in the Middle East remained highly uncertain.
Despite gold’s traditional role as a safe-haven asset, inflation and interest-rate concerns appeared to outweigh demand for protection against geopolitical risk.
Higher Oil Prices Raise Rate Concerns
The surge in oil prices increased fears of energy-driven inflation.
Higher fuel and transport costs can spread across the broader economy, making it more difficult for central banks to bring inflation under control.
According to the CME FedWatch tool, traders increased their expectations for a possible Federal Reserve interest-rate hike in 2026 during the week.
A more hawkish Fed outlook is generally negative for gold because the metal does not generate interest or income.
When bond yields and interest rates rise, investors may prefer interest-bearing assets over non-yielding investments such as gold.
Gold’s Safe-Haven Appeal Remains Limited
ANZ analysts said gold received some support from expectations that the conflict in the Middle East could remain contained.
However, they also noted that the rebound in energy prices may encourage the Federal Reserve to keep rates elevated for longer in order to control stubborn inflation.
Gold has generally underperformed as a safe-haven asset since the beginning of the U.S.-Iran conflict.
Concerns about persistent inflation, tighter monetary policy and higher bond yields have largely overshadowed the metal’s traditional appeal during periods of geopolitical uncertainty.
Silver and Platinum Record Mixed Performance
Other precious metals delivered mixed results during the week.
Spot silver fell 0.43% on Friday to $59.6995 per ounce. The metal was down more than 4% for the week, making it one of the weakest performers in the sector.
Platinum performed relatively better. Spot platinum rose 0.58% to $1,626.85 per ounce on Friday.
However, platinum was still heading toward a weekly decline of around 0.3%.
