Gold Prices Head for Weekly Loss as US-Iran Tensions Weigh on Market Sentiment
Gold prices remained largely unchanged on Friday but were on track to post a weekly loss as escalating military tensions between the United States and Iran fueled concerns over rising inflation and higher interest rates.
Meanwhile, silver and platinum were also expected to end the week lower, pressured by surging oil prices and a stronger U.S. dollar, which recovered from last week's losses.
Spot gold was little changed at $4,125.03 per ounce, while gold futures slipped 0.1% to $4,135.67 per ounce as of 09:11 GMT. The precious metal has fallen approximately 1.6% this week, reflecting cautious investor sentiment.
Gold markets have been shaken by a series of U.S. military strikes on Iran, which triggered a sharp rally in global crude oil prices. Rising geopolitical tensions have heightened concerns that energy-driven inflation could remain elevated, complicating the outlook for global monetary policy.
U.S. President Donald Trump announced that the ceasefire with Iran had ended and ordered additional military operations against the country, prompting retaliatory action from Tehran. Although an Axios report indicated that regional mediators are attempting to preserve a recently negotiated U.S.-Iran memorandum of understanding, prospects for lasting peace in the Middle East remain highly uncertain.
The surge in oil prices has intensified fears of higher inflation, increasing expectations that the Federal Reserve may maintain a more hawkish policy stance. According to the CME FedWatch Tool, markets have continued to price in greater odds of Federal Reserve interest rate hikes in 2026.
Higher interest rates typically weigh on non-yielding assets such as gold because they increase the opportunity cost of holding bullion compared with interest-bearing investments.
Other precious metals also posted weekly declines despite modest gains on Friday. Spot silver rose 0.5% to $60.2550 per ounce but remained down 4.1% for the week. Spot platinum climbed 1.2% to $1,636.14 per ounce, although it was still down 0.4% on a weekly basis.
Investors are expected to remain focused on developments in the Middle East, movements in oil prices, and upcoming U.S. economic data, all of which could influence the Federal Reserve's policy outlook and the near-term direction of gold prices.