Gold Prices Head for Second Weekly Loss Amid Inflation Concerns
Gold prices edged higher on Friday but remained on track for a second consecutive weekly decline as investors weighed inflation risks linked to the ongoing U.S.–Israel conflict with Iran. Rising energy prices have increased concerns that global inflation could accelerate, limiting gold’s ability to rally despite geopolitical uncertainty.
Bullion received modest support after the U.S. dollar and oil prices paused their recent gains. The U.S. Treasury Department also announced additional waivers allowing limited purchases of sanctioned Russian crude oil, a move intended to ease supply disruptions caused by the conflict with Iran.
Gold Trading Near Key Range
Spot gold rose 0.1% to $5,085.15 per ounce by 10:39 ET (14:39 GMT), while gold futures declined 0.8% to $5,086.20 per ounce. For the week, spot gold was on track to fall roughly 1.8%.
Although gold is widely regarded as a safe-haven asset during geopolitical crises, the precious metal has struggled recently due to the strength of the U.S. dollar. A stronger dollar typically makes gold more expensive for international buyers, reducing demand in global markets.
Oil Price Risks Could Drive Global Inflation
A large share of global oil and gas shipments passes through the Strait of Hormuz, a critical energy trade route. Many of these energy supplies are used in products such as fertilizers and plastics, meaning that rising energy prices could quickly spread inflationary pressures across global economies.
These inflation concerns may prompt central banks, including the Federal Reserve, to reconsider potential interest rate cuts in the near term. Higher interest rates tend to support the U.S. dollar by attracting foreign investment. As a result, the dollar index—measuring the greenback against a basket of major currencies—has strengthened as the Middle East conflict intensified.
Gold Still Up for the Year Despite Pullback
Since the conflict escalated in late February, gold prices have largely traded between $5,000 and $5,200 per ounce. While the metal remains positive for the year, it has retreated from the record high near $5,600 per ounce reached earlier in 2026.
Analysts at ANZ noted that despite facing short-term headwinds, gold continues to serve as an important portfolio diversifier. According to the bank, the precious metal still provides protection against a wide range of macroeconomic and geopolitical risks.
Other Precious Metals Post Modest Gains
Other precious metals posted small gains on Friday but recorded relatively muted performance during the week. Spot silver increased 0.7% to $84.3275 per ounce, while platinum rose 0.5% to $2,143.21 per ounce.
PCE Inflation Data Remains Key Market Focus
Investors are also closely monitoring new U.S. economic data for signals about inflation and interest rate policy.
The Federal Reserve’s preferred inflation measure—the personal consumption expenditures (PCE) price index—rose 3.1% in the 12 months through January, matching expectations and slightly accelerating from December’s 3.0% increase.
Excluding volatile items such as food and energy, the core PCE price index increased by 0.4% month-over-month in January, in line with analysts’ forecasts and the previous month’s pace.
Headline PCE inflation rose 2.8% year-over-year, slightly below projections of 2.9%. On a monthly basis, the index increased 0.3%, meeting expectations and easing slightly compared to December.
The Federal Reserve targets inflation at 2%, and policymakers are scheduled to announce their next interest rate decision after a two-day meeting next week. Markets widely expect the Fed to keep borrowing costs unchanged within the 3.5% to 3.75% range.
Higher interest rates typically weigh on gold prices because yield-bearing assets such as bonds become more attractive to investors.
