Gold Rises for 2nd Session

Gold rose slightly to above $4,600 on Friday, extending gains of nearly 2% from the prior session, supported by a decline in oil prices and U.S. dollar depreciation. WTI prices were down more than 3% on Friday morning after Pakistani officials confirmed that Iran had sent an updated peace proposal. At the same time, the dollar index hovered at a two-month low, pressured by a sharp rally in the yen following suspected intervention by Japanese authorities. Still, bullion prices are down almost 15% since the beginning of the war, as energy supply disruptions have heightened inflation concerns, reinforcing expectations that major central banks may keep interest rates elevated for longer or potentially tighten further. Meanwhile, data from the World Gold Council showed that central banks increased their gold reserves in the first quarter.

Gold steadied above $4,600 an ounce on Friday after rising nearly 2% in the prior session, supported by a sharp depreciation in the US dollar following reports that Japan intervened in currency markets. A softer greenback typically lends support to gold, which is priced in US dollars. Despite this, bullion remains on track for a second weekly decline amid dimming prospects for a US-Iran peace deal and expectations that the Strait of Hormuz would not reopen anytime soon. Trump said that the US would maintain its naval blockade of Iranian ports, while Tehran pledged not to abandon its nuclear program and signaled it would retain control of the strait. The resulting energy supply disruption has heightened inflation concerns, reinforcing expectations that major central banks may keep interest rates elevated for longer or potentially tighten further. Meanwhile, data from the World Gold Council showed that central banks increased their gold reserves in the first quarter.

Gold prices rose to above $4,600 an ounce on Thursday, rebounding from one-month lows as dollar weakened and oil prices edged lower. Investors were also monitoring geopolitical tensions after it was reported that US military would brief President Trump on potential action against Iran. Trump said the US would maintain its naval blockade on Iran until a nuclear agreement is reached. The prolonged Middle East conflict and the near-closure of the Strait of Hormuz continued to unsettle global markets, leading traders to dial back expectations for rate cuts this year and instead begin pricing in the possibility of a hike in 2027. Meanwhile, the US Federal Reserve left its policy settings unchanged as widely anticipated, although four officials dissented, highlighting increasing divisions over the policy outlook amid heightened uncertainty tied to the Iran conflict.