Gold Prices Decline as Dollar Strength Weighs on Market
Gold prices moved lower on Friday and were on track for significant weekly losses, as rising uncertainty surrounding the U.S.-Iran conflict drove investors toward the U.S. dollar.
Spot gold dropped 0.5% to $4,672.22 per ounce, while gold futures declined 0.8% to $4,686.89 per ounce during early trading hours.
Weekly Losses Deepen Amid Strong Dollar
Gold was set to record a weekly decline of around 3%, pressured by a stronger dollar. Concerns that the ongoing Iran conflict could fuel inflation boosted demand for the greenback, which was heading for its strongest weekly performance since early March.
Precious Metals Under Pressure
Other precious metals also faced losses due to dollar strength. Spot silver fell 1.2% to $74.483 per ounce and was on track for a sharp weekly drop of nearly 8%.
Meanwhile, spot platinum declined 1% to $1,992.72 per ounce, marking a weekly loss of approximately 5.4%.
Profit-Taking Weighs on Silver and Platinum
Silver and platinum were particularly vulnerable to profit-taking after outperforming gold in recent weeks. Both metals had previously benefited from optimism around their industrial demand, as well as expectations of a potential silver supply deficit by 2026.
Inflation Fears and Interest Rate Outlook
Markets remained concerned that rising oil prices linked to the Iran conflict could drive inflation higher. This, in turn, may prompt major central banks to adopt a more hawkish stance and keep interest rates elevated.
Higher interest rates typically reduce the attractiveness of non-yielding assets like gold, adding further downward pressure on prices.
Geopolitical Tensions Remain Elevated
Although the United States extended a ceasefire with Iran earlier this week, tensions between the two countries continued. Iran maintained its actions in the Strait of Hormuz, while the U.S. kept its naval presence in the region.
Donald Trump stated that there is no urgency to finalize a peace agreement, while also warning of potential military action against Iranian vessels operating in the area.
Ongoing Conflict Adds Market Uncertainty
In a separate development, Iran released footage reportedly showing its forces boarding a vessel, while also highlighting its naval capabilities in the region. These developments added to market uncertainty and reinforced demand for safe-haven assets such as the U.S. dollar.
