Gold prices climbed on Friday, supported by a weaker dollar and declining U.S. Treasury yields, while investors assessed the economic implications of an escalating Middle East conflict.
Spot gold was up 0.7% at $5,112.34 per ounce, as of 0059 GMT. U.S. gold futures for April delivery edged 0.2% lower to $5,115.80.
Bullion, however, has lost roughly 1% so far this week, weighed down by fading hopes for near-term U.S. interest-rate cuts as higher energy prices fuel inflation concerns.
The dollar nudged lower, making greenback-priced commodities such as bullion cheaper for holders of other currencies.
The U.S. 10-year Treasury yields eased, increasing the appeal of non-yielding bullion.
Heightening geopolitical tensions, Iran’s Supreme Leader Mojtaba Khamenei said on Thursday that Tehran will keep the strategic Strait of Hormuz closed as leverage against the United States and Israel, a development that has stoked concernsabout global energy supply and risk assets.
Oil prices rose above $100 a barrel, as attacks on oil tankers in the Gulf and warnings from Iran shattered prospects of quick de-escalation in the Middle East conflict.
As oil prices surged, U.S. President Donald Trump again demanded Federal Reserve Chair Jerome Powell cut interest rates.
Goldman Sachs analysts on Thursday pushed back their forecast for the next U.S. Fed rate cut to September and December, from June previously.
Traders expect the Fed to keep rates steady in the current 3.5%-3.75% range at the end of its two-day meeting on March 18, according to CME Group’s FedWatch tool.
While recent inflation data suggest price growth is under control, the war on Iran and the resulting spike in crude prices have yet to filter through the data.
Investors are now awaiting release of January’s delayed Personal Consumption Expenditures Index, due later in the day.
Spot silver was up 1.5% at $85.03 per ounce. Spot platinum gained 1.3% to $2,159.01 and palladium rose 0.8% to $1,630.71.
