Gold Rises Slightly but Heads for Weekly Loss as Strong Dollar and Yields Weigh

Gold prices edged higher in Asian trading on Friday, but the precious metal remained on track for a weekly decline as a stronger U.S. dollar and rising Treasury yields offset safe-haven demand driven by escalating tensions in the Middle East.

By 01:29 ET (06:29 GMT), spot gold rose 0.8% to $5,119.56 per ounce, while U.S. gold futures gained 0.3% to $5,128.81 per ounce.

Despite Friday’s gains, gold was still down more than 3% for the week, pressured by a firm dollar and fading expectations that the Federal Reserve will cut interest rates soon.

Middle East conflict supports safe-haven demand

The ongoing conflict in the Middle East entered its seventh day on Friday, with no clear signs of de-escalation, keeping global markets on edge.

Fighting between the United States, Israel, and Iran has intensified over the past week, with missile strikes and retaliatory attacks spreading across the region and raising fears of disruptions to global energy supplies.

Adding to uncertainty, U.S. President Donald Trump said he wanted a role in determining Iran’s next leadership once the conflict ends, highlighting the growing geopolitical stakes in the region.

Gold typically benefits from geopolitical instability and risk aversion, but the metal has struggled to sustain a rally this week as macroeconomic factors limited its upside.

Strong dollar and yields cap gains

The U.S. Dollar Index slipped 0.3% on Friday, though it remained on track for a weekly gain of about 1.5%, keeping pressure on gold prices.

A stronger dollar makes gold more expensive for buyers using other currencies, reducing global demand.

At the same time, rising U.S. Treasury yields have also weighed on bullion by increasing the opportunity cost of holding non-yielding assets such as gold.

Oil surge fuels inflation concerns

Meanwhile, oil markets have seen a sharp rally amid fears that the Middle East conflict could disrupt critical energy infrastructure and shipping routes in the Gulf.

Oil prices are on track to rise more than 18% this week, raising concerns about a renewed wave of global inflation.

Higher energy prices could complicate the policy outlook for central banks, including the U.S. Federal Reserve, as policymakers weigh inflation risks against economic growth.

Payrolls report in focus

Investors are now turning their attention to the U.S. nonfarm payrolls report for February, due later on Friday.

A stronger-than-expected reading could reinforce expectations that the Federal Reserve may delay interest rate cuts, which would likely keep upward pressure on the dollar and bond yields.

Other metals advance

Elsewhere in the metals market:

• Silver rose 0.5% to $83.97 per ounce
• Platinum gained 1.5% to $2,152.39 per ounce

In industrial metals, London Metal Exchange copper futures climbed 0.3% to $12,956.33 per ton, while U.S. copper futures advanced 0.4% to $5.84 per pound.

Gold’s near-term direction will likely depend on a combination of geopolitical developments in the Middle East and incoming U.S. economic data, particularly signals that could influence the Federal Reserve’s interest rate path.