Gold prices edged lower on Friday and remained on course for a weekly decline as renewed military tensions between the United States and Iran increased concerns that higher energy costs could keep inflation elevated and delay interest rate cuts.
Silver and platinum were also set to end the week lower, while oil prices continued to trade at stronger levels and the U.S. dollar steadied after weakening in the previous week.
Spot gold fell 0.6% to $4,101.11 per ounce, while gold futures slipped 0.8% to $4,108.90 per ounce by 04:46 ET (08:46 GMT). The spot price has declined around 1.8% over the course of the week.
Inflation Fears Weigh on Gold
The precious metal came under pressure after the United States launched a series of military strikes against Iran, triggering a sharp rise in crude oil prices.
U.S. President Donald Trump declared that the ceasefire with Iran had ended and ordered additional military action, prompting retaliatory strikes from Tehran.
Although an Axios report indicated that regional mediators were attempting to preserve a recent U.S.-Iran memorandum of understanding, uncertainty over the situation in the Middle East remained high.
The rally in oil prices revived concerns that energy-driven inflation could encourage the Federal Reserve to maintain a more hawkish policy stance. According to CME FedWatch data, markets have steadily increased expectations for a U.S. interest rate hike in 2026.
Higher interest rates generally reduce the appeal of non-yielding assets such as gold because they increase the opportunity cost of holding the metal instead of interest-bearing investments.
“Gold found some support on expectations of limited escalation in the Middle East conflict. This is despite earlier concerns that a rebound in energy prices could see the Fed keeping interest rates higher for longer to combat stubbornly high inflation,” ANZ analysts wrote in a note.
Despite its traditional safe-haven status, gold has largely underperformed since the conflict between the United States and Iran intensified, as inflation and interest-rate concerns have outweighed demand for defensive assets.
Silver and Platinum Also End the Week Lower
Performance across the precious metals sector was mixed.
Spot silver fell 0.7% on Friday to $59.5250 per ounce and has declined by more than 4% over the week.
Spot platinum slipped 0.1% to $1,616.14 per ounce. Although it also moved lower this week, its weekly loss of around 0.3% was more limited than that of the other precious metals.
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