Gold Eyes Losses

Gold Holds Near $4,275, Heads for Weekly Loss as Fed Rate Hike Expectations Grow

Gold prices were little changed on Friday and remained on track for a weekly decline of more than 3%, as elevated energy prices and rising U.S. Treasury yields continued to reinforce expectations of further Federal Reserve policy tightening.

As of 10:41 GMT, spot gold (XAU/USD) was nearly unchanged at $4,274.89 per ounce, while Gold Futures gained 0.3% to $4,309.72. Silver (XAG/USD) slipped 0.1% to $63.79, and platinum (XPT/USD) edged down 0.1% to $1,754.17. Meanwhile, the U.S. Dollar Index climbed 0.1% to 101.29.

Hormuz Uncertainty Keeps Oil and Inflation Risks in Focus

Oil prices stabilized after surging on Thursday as the United States and Iran remained unable to reach a final agreement on reopening the Strait of Hormuz, a critical route for global energy supplies.

Reports indicate that negotiators are exploring a phased deal that would allow Tehran to reopen the strategic waterway while Washington eases port restrictions. The possibility of continued disruptions to energy flows has supported oil prices and fueled concerns that higher fuel costs could slow the decline in inflation.

The energy market remains a key factor for gold traders, who are assessing whether renewed inflationary pressure from rising oil prices could push the Federal Reserve toward additional monetary tightening following last week’s interest rate increase—the first rate hike in three years.

Higher interest rates and Treasury yields typically weigh on gold because the precious metal does not generate interest income. U.S. bond yields rose sharply on Thursday, with the 30-year Treasury yield approaching 5.5%, its highest level in more than two decades.

The rise in yields has also strengthened expectations that borrowing costs could remain elevated for longer, creating additional headwinds for non-yielding assets such as gold.

Investment Demand Remains Resilient Despite Macro Headwinds

According to analysts at ANZ, investment demand for gold has remained resilient, with no significant liquidation observed so far despite increasingly challenging macroeconomic conditions.

This suggests that the recent decline in gold prices has not triggered widespread investor exits, highlighting continued confidence in the metal as a long-term store of value.

However, the short-term outlook for gold remains closely tied to movements in oil prices, Treasury yields, and expectations surrounding the Federal Reserve’s next policy decision.

Further increases in energy costs could keep inflation concerns elevated, while higher yields and a stronger U.S. dollar are likely to continue exerting pressure on gold prices.

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Gold Price Pressure

Gold Prices Edge Lower as Rising Oil and Treasury Yields Weigh on Bullion

Gold prices slipped on Thursday following a sharp selloff in the previous session, as higher oil prices, a stronger U.S. dollar, and rising Treasury yields continued to pressure the precious metal. Investors are also reassessing the likelihood of further Federal Reserve interest rate hikes amid persistent inflation concerns.

As of 12:58 WIB, spot gold (XAU/USD) was down 0.2% at $4,281.13 per ounce, while U.S. gold futures declined 0.1% to $4,315.55. Silver fell 0.6% to $64.09 per ounce, while platinum gained 0.3% to $1,758.69 and palladium advanced 0.4% to $1,273.79. The U.S. Dollar Index remained largely unchanged at 101.13.

Oil Prices Rise as Iran Tensions Cloud Peace Prospects

Gold remains highly sensitive to Federal Reserve policy expectations, with investors closely monitoring whether elevated energy prices could keep inflation high enough to justify additional interest rate increases. Higher rates typically weigh on gold because the metal does not generate yield.

Oil prices moved higher after Iranian President Masoud Pezeshkian told the United Nations that Iran would not allow unrestricted navigation through the Strait of Hormuz while U.S. sanctions and blockades remain in place.

His remarks highlighted the challenges facing diplomatic efforts between Tehran and Washington, despite renewed negotiations taking place this week.

Pezeshkian reiterated that Iran remains open to negotiations but would not respond to threats. He also stated that Tehran is not pursuing nuclear weapons while emphasizing that the country will not abandon its right to develop nuclear technology for economic purposes.

The comments came a day after U.S. President Donald Trump said American officials had held “very good” discussions with Iranian representatives on the sidelines of the United Nations summit.

Gold has fallen roughly 20% since the outbreak of the U.S.-Iran conflict in late February, with energy prices and Federal Reserve policy expectations remaining the primary drivers of market sentiment.

Strong U.S. Data and Treasury Selloff Reinforce Rate Pressure

The U.S. Treasury market remained under pressure following stronger-than-expected economic data and weak government debt auctions. The move has strengthened expectations that inflation could remain elevated, pushing yields across much of the curve to their highest levels in nearly two decades.

The benchmark U.S. five-year Treasury yield climbed above 5% for the first time since 2007, creating an additional headwind for non-yielding assets such as gold.

Meanwhile, U.S. business activity expanded at its fastest pace in more than five years. Federal Reserve Governor Michael Barr indicated that further interest rate increases may be necessary to bring inflation back to the central bank’s 2% target. His comments echoed similar warnings from other policymakers who continue to view inflationary pressures as persistent.

Interest-rate swaps now suggest markets are pricing in at least three additional Federal Reserve rate hikes by April next year, a notable increase from expectations earlier this week.

Gold Outlook Remains Challenging

Despite near-term weakness, gold continues to receive support from long-term demand fundamentals. However, stronger economic growth, rising Treasury yields, elevated oil prices, and a firmer U.S. dollar are currently limiting the precious metal’s upside potential and keeping pressure on bullion prices in the short term.

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Gold Prices Decline

Gold Prices Slip as Stronger US Dollar and Higher Rate Expectations Weigh

Gold prices declined on Wednesday as a stronger US dollar and expectations of prolonged higher interest rates continued to pressure the precious metal. Investors remained focused on inflation risks and the possibility of additional monetary tightening by the Federal Reserve.

At 16:53 GMT, spot gold fell 0.9% to $4,318.05 per ounce, while gold futures eased 0.5% to $4,354.90 per ounce.

Meanwhile, the US Dollar Index (DXY), which measures the greenback against a basket of major currencies, rose 0.1% to 100.71, reaching its highest level since July 30. A stronger dollar typically makes gold more expensive for holders of other currencies, reducing international demand.

“US dollar has become the preferred safe-haven asset for investors during periods of uncertainty,” said David Morrison, Senior Market Analyst at Trade Nation, in a market note.

The greenback also found support from expectations that the Federal Reserve may maintain a restrictive monetary policy stance to combat persistent inflationary pressures, particularly those linked to elevated energy costs. Although crude oil prices have retreated below $100 per barrel amid easing concerns over Middle East supply disruptions and renewed diplomatic efforts, oil remains more than 60% higher than at the start of the year.

Last week, the Federal Reserve raised its benchmark interest rate by 25 basis points. Fed Chair Kevin Warsh signaled that further rate increases could be necessary in the coming months if inflation remains elevated. Additional comments from St. Louis Fed President Alberto Musalem and Chicago Fed President Austan Goolsbee also pointed to the possibility of more policy tightening to bring inflation under control.

Analysts at ANZ noted that gold has been trading within a relatively narrow range as investors balance the prospect of further rate hikes against growing investment demand for the precious metal.

According to ANZ, China’s gold imports reached approximately 1,000 metric tons during the first eight months of 2026. Chinese gold-backed exchange-traded funds (ETFs) added around 44 tons in August, while the People’s Bank of China accelerated its purchases, acquiring roughly 20 tons during the same month.

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