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Gold prices edged higher in Asian trading on Friday, recovering some ground after a sharp sell-off in the previous session, as investors weighed renewed geopolitical risks in the Middle East against lingering uncertainty over the future path of U.S. interest rates.
Spot gold rose 0.5% to $4,953.58 an ounce by 01:08 ET (06:08 GMT), while April gold futures climbed 0.5% to $4,972.70 an ounce. The gains followed a steep decline of more than 3% on Thursday, when bullion fell below key technical levels amid heightened volatility.
Silver also advanced after suffering heavy losses a day earlier, highlighting the fragile tone across precious metals markets following a week marked by sharp price swings. Spot silver gained 1.6% to $76.4855 an ounce, while spot platinum rebounded above the $2,000 level after posting deep losses in the prior session.
Geopolitical risk lends support
Gold found support from renewed safe-haven demand after reports indicated that Washington was planning to deploy a second aircraft carrier—the USS Gerald R. Ford—to the Middle East, as nuclear negotiations with Iran appeared to stall. Rising geopolitical tensions in the region helped revive demand for defensive assets, even as broader market sentiment remained cautious.
Rate uncertainty still weighs
Despite Friday’s rebound, uncertainty surrounding U.S. monetary policy continues to cap upside in precious metals. Stronger-than-expected U.S. payrolls data for January suggested resilience in the labor market, reinforcing expectations that the Federal Reserve may keep interest rates higher for longer. The U.S. dollar also recovered from its weekly lows following the jobs report, adding pressure to dollar-denominated commodities such as gold.
Relatively elevated interest rates reduce the appeal of non-yielding assets like gold, while a firmer dollar further dampens demand from non-U.S. buyers.
U.S. CPI in focus
Market attention has now shifted to U.S. consumer price index data for January, due later on Friday, which could provide clearer direction for gold prices. Inflation and labor market conditions remain the Fed’s two key policy pillars.
While markets broadly expect both headline and core inflation to cool in January, recent history has kept investors on edge. January CPI readings have surprised to the upside for four consecutive years, raising the risk of a more hawkish outcome.
“An unexpected rise in inflation could reduce the Fed’s desire to cut interest rates further, making gold less attractive for investors,” analysts noted, warning that higher-for-longer rates could continue to pressure precious metals.
Muted weekly performance
Thursday’s sharp losses largely erased a recent rebound in gold and other precious metals, leaving bullion only marginally higher on the week. Prices have struggled to establish a clear trend since a late-January flash crash, with shifting interest rate expectations driving erratic moves.
Gold’s retreat from recent record highs was initially sparked by President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve chair, a move perceived by markets as less dovish. That pressure was compounded by stronger U.S. jobs data and heightened volatility, which has also blunted gold’s traditional safe-haven appeal.
With inflation data imminent and geopolitical risks simmering, precious metals remain caught between competing forces, leaving prices vulnerable to further sharp moves in the near term.
