Gold prices climbed on Friday, recovering from sharp losses in the previous session as investors monitored escalating tensions in the Middle East and assessed fresh U.S. inflation figures.
At 08:50 ET (13:50 GMT), spot gold advanced 1.4% to $4,988.45 per ounce, while April gold futures gained 1.3% to $5,013.81 per ounce. The rebound followed a steep drop of more than 3% in spot prices a day earlier.
Other precious metals also recovered. Spot silver jumped 4.3% to $78.945 per ounce after plunging nearly 10% in the prior session. Spot platinum rose 1.6% to $2,054.90 per ounce, reclaiming the $2,000 level after heavy recent losses.
Safe-haven demand supported bullion after reports indicated that Washington plans to deploy a second aircraft carrier, the USS Gerald R. Ford, to the Middle East as nuclear negotiations with Iran stalled. Heightened geopolitical uncertainty often boosts demand for gold as investors seek protection against risk.
At the same time, uncertainty surrounding future U.S. interest rate cuts continued to weigh on precious metals. Recent payroll data showed resilience in the U.S. labor market in January, strengthening the dollar and limiting gold’s upside momentum. The greenback recovered from weekly lows following Wednesday’s nonfarm payrolls release.
Fresh U.S. consumer price index data added further context. Headline inflation rose 2.4% year-on-year in January, slightly below expectations of 2.5% and December’s 2.7% reading. On a monthly basis, CPI increased 0.2%, softer than the anticipated 0.3%.
Core CPI, which excludes volatile food and energy prices, rose 2.5% annually and 0.3% month-on-month, largely in line with forecasts. Analysts noted that while the data offered modest support to markets, it did not significantly alter the broader inflation narrative.
Inflation trends and labor market strength remain the Federal Reserve’s key considerations when setting interest rates. Higher interest rates tend to reduce the appeal of non-yielding assets such as gold, while a stronger U.S. dollar also pressures bullion prices.
Despite Friday’s rebound, gold and other precious metals are heading for a relatively subdued week. Thursday’s decline erased much of the recent recovery, leaving gold only marginally higher overall.
Market direction has remained uncertain since a late-January flash crash, with rate expectations continuing to drive volatility. Gold’s pullback from record highs was initially triggered after U.S. President Donald Trump nominated Kevin Warsh as the next Federal Reserve Chair, a choice viewed by markets as less dovish.
Stronger-than-expected U.S. jobs data further reduced expectations for aggressive rate cuts, while sharp price swings weakened gold’s traditional safe-haven appeal.
Meanwhile, Capital Economics warned that surging Chinese gold demand may reflect speculative activity rather than defensive buying. Analyst Hamad Hussain noted that increased leverage and futures trading in China suggest that demand could resemble a developing bubble. The firm cautioned that this dynamic may contribute to greater volatility in the gold market in the coming months.
