Gold prices edged modestly lower on Friday, slipping below the record highs reached earlier in the week, as strong U.S. labor market data reduced expectations for near-term interest rate cuts by the Federal Reserve. At the same time, easing geopolitical tensions surrounding Iran weighed on safe-haven demand.
By 08:00 ET (13:00 GMT), spot gold was down 0.3% at $4,601.02 an ounce, while U.S. gold futures fell 0.4% to $4,605.45 per ounce.
The precious metal has retreated from Wednesday’s record peak of $4,642.72 an ounce. Despite the pullback, gold remained on course for a weekly gain of around 2%, supported by earlier strength in risk-off flows.
Strong U.S. data reshapes Fed expectations
Market sentiment shifted after data released on Thursday showed U.S. initial jobless claims fell more than expected, highlighting the continued resilience of the labor market. The stronger reading reinforced expectations that the Federal Reserve could keep interest rates elevated for longer, pushing back market projections for rate cuts later this year.
Higher interest rates typically reduce the appeal of non-yielding assets such as gold. Following the data, the U.S. dollar strengthened, with the Dollar Index climbing to a six-week high against a basket of major currencies, adding further pressure to bullion by making it more expensive for overseas buyers.
Easing Iran tensions reduce safe-haven demand
Gold prices had surged earlier in the week as investors sought safety amid heightened geopolitical risks linked to unrest in Iran. Protests and government crackdowns had raised concerns about possible escalation, boosting demand for safe-haven assets, including precious metals.
However, comments from U.S. President Donald Trump helped calm markets. Trump softened his earlier hawkish tone on potential military action, signaling a more cautious approach and citing reports that violent crackdowns on protesters may be easing.
Broader metals market declines
Other precious and industrial metals also traded lower on Friday, pressured by the stronger dollar. Silver prices dropped 2.5% to $90.173 per ounce, while platinum futures fell 3.6% to $2,322.65 an ounce.
Despite the daily decline, silver remained set for a weekly gain of more than 14% after reaching fresh record levels earlier in the week. Prices eased after the Trump administration announced a delay in import tariffs on critical minerals.
Analysts at Saxo Bank noted that silver continues to attract heavy speculative interest from both buyers and sellers, leading to sharp price swings and difficult trading conditions.
In base metals, benchmark copper futures on the London Metal Exchange fell 1.9% to $12,886.00 a ton, while U.S. copper futures declined 2% to $5.8715 a pound.
