Gold Rebounds in Asian Trade but Weekly Losses Deepen
Gold prices edged higher in Asian trading on Friday, recovering some recent losses. However, the metal remained on track for a significant weekly decline as the U.S.-Israel conflict with Iran fueled inflation concerns and reduced expectations for interest rate cuts.
Spot gold climbed 1.2% to $4,706.99 per ounce, while gold futures gained 2.2% to $4,706.54/oz in early trading.
Inflation Fears and Central Bank Signals Weigh on Gold
The precious metal had dropped sharply in the previous session after several major central banks warned about rising inflation risks linked to the Iran conflict.
These warnings dampened hopes for near-term rate cuts, creating a negative environment for non-yielding assets like gold.
Dollar Weakness Offers Temporary Support
Gold found some support from a weaker U.S. dollar, which was heading for its first weekly loss in three weeks.
The greenback lagged behind other major currencies as central banks signaled potential rate hikes in response to surging energy prices.
Gold Set for Worst Weekly Drop Since 2020
Despite Friday’s rebound, spot gold was still down as much as 8% for the week, marking its steepest weekly decline since early 2020.
The metal also fell below its recent trading range of $5,000–$5,200 per ounce, a level it had maintained since the start of the conflict.
Safe Haven Demand Overshadowed by Rising Yields
Although gold is traditionally seen as a safe haven, demand was overshadowed by a surge in the U.S. dollar and Treasury yields.
Markets have been increasingly concerned about inflationary pressures stemming from the conflict, which has shifted investor focus away from gold.
Oil Price Surge Fuels Hawkish Central Bank Outlook
Oil prices surged to near four-year highs this week following attacks on key Middle Eastern energy infrastructure, raising fears of supply disruptions.
This spike prompted several major central banks to adopt a more cautious stance on inflation.
The Reserve Bank of Australia raised interest rates, while the Federal Reserve, European Central Bank, Swiss National Bank, and Bank of Japan held rates steady but signaled limited policy easing ahead.
Silver and Platinum Also Face Weekly Losses
Other precious metals also rebounded on Friday but remained under pressure for the week.
Spot silver rose 0.7% to $73.22 per ounce, while platinum gained 1.5% to $2,004.13/oz.
However, silver and platinum were still down დაახლოებით 9.8% and 2.9% for the week, respectively.
Silver Outlook Weakens Amid Market Pressures
Analysts at OCBC indicated they may revise their silver price outlook slightly lower, noting that silver is more sensitive to fluctuations in the dollar and broader risk sentiment.
Additionally, concerns over global economic growth and weaker industrial demand—driven by geopolitical tensions—could further weigh on silver prices.
Despite this, silver continues to benefit from strong industrial demand, particularly in sectors like solar energy and electrification, which may provide some near-term support.
