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Gold prices fell in Asian trade on Friday, as a slight improvement in risk appetite, stemming from the White House’s comments suggesting that a U.S. strike on Iran over the Israel-Iran conflict was not imminent, pressured the yellow metal.
The decline in gold was also influenced by hawkish remarks from the Federal Reserve earlier this week, which supported the U.S. dollar. Despite the dollar pulling back slightly on Friday, it remained set for weekly gains, further weighing on gold. Additionally, the strength of the dollar capped the recent rally in platinum prices, which had hit an over four-year high earlier.
Gold Prices Hit by Improved Market Sentiment and Trump’s Postponement of Iran Decision
Spot gold fell by 0.5% to $3,353.17 an ounce, while gold futures for August dropped 1.1% to $3,369.40/oz by 00:58 ET (04:58 GMT). The losses came amid gains in risk-driven markets after the White House announced that President Donald Trump would decide on whether to engage in the Israel-Iran conflict in two weeks, easing immediate concerns of a U.S. attack on Iran.
While the “two weeks” timeline provided temporary relief, markets remained cautious, as Trump has previously used similar timelines for key policy decisions, only to delay them indefinitely. The delay in deciding whether the U.S. will escalate its involvement in the conflict helped ease some of the geopolitical risk premium built into markets, encouraging a modest risk-on sentiment.
The conflict between Israel and Iran entered its eighth day on Friday, with both sides continuing to launch attacks on each other, but the uncertainty over U.S. involvement kept markets in a holding pattern.
Resilience in the Dollar Curbing Precious Metal Rally
Other precious metals also retreated as the dollar gained strength following the Federal Reserve’s hawkish comments earlier in the week. Silver futures fell 1.6% to $35.765/oz. Industrial metals were also under pressure, with copper futures on the London Metal Exchange falling 0.3% to $9,602.05 a ton, and U.S. copper futures dipping 0.9% to $4.7650 a pound.
Platinum Retreats from Four-Year High, but Remains Strong for the Week
Platinum futures fell 1.5% to $1,282.75/oz, retreating from the over four-year high reached in the prior session. Despite the dip, platinum is still set for a strong week, up 5.8%, marking its third consecutive week of gains.
The surge in platinum prices since mid-May has been fueled by a strong industry report highlighting robust demand and shrinking supplies. This has triggered a speculative rally, with investors quickly building long positions in the white metal. However, analysts remain cautious about the sustainability of this rally, given the volatility in the metal’s performance over recent years.
Outlook for Precious Metals
While gold prices faced downward pressure from an improved risk appetite and a stronger dollar, the ongoing geopolitical tensions and uncertainty surrounding U.S. involvement in the Israel-Iran conflict could continue to fuel volatility in the market. Platinum’s strong performance this week also suggests that supply-demand dynamics may continue to drive investor interest, although caution remains due to potential market corrections.
