Key Highlights
- Gold traded around $4,765 per ounce, poised for its third consecutive weekly advance of approximately 2%
- An unstable US-Iran ceasefire agreement and scheduled weekend negotiations in Islamabad are creating market uncertainty
- Global central banks, particularly Poland and China, maintain consistent gold accumulation
- The dollar’s decline this week enhanced gold’s affordability for international purchasers, bolstering demand
- Friday’s US inflation report could alter market expectations regarding Federal Reserve monetary policy
The precious metal maintained its position around $4,765 per ounce on Friday, positioning itself for a third successive weekly advance. This approximately 2% weekly climb unfolds as market participants monitor the delicate ceasefire arrangement between Washington and Tehran.
The truce announcement earlier in the week initially provided market relief. However, tensions resurfaced rapidly. Lebanese territory witnessed ongoing military operations, while Iranian officials refuted claims that their representatives had reached Islamabad for the planned weekend discussions with American counterparts.
President Trump expressed “optimism” regarding potential peace negotiations. Simultaneously, he issued warnings to Iran concerning charges imposed on vessels navigating the Strait of Hormuz, a critical waterway for international petroleum transport that remains predominantly inaccessible.
Notwithstanding this week’s upward movement, the yellow metal has declined approximately 10% since hostilities commenced in late February. Certain market participants liquidated gold holdings to offset portfolio losses elsewhere, diminishing its traditional safe-haven attractiveness.
Oil markets were tracking their most substantial weekly decline since June. Equity markets rebounded throughout the week, while the US Dollar Index dropped over 1%, enhancing gold’s appeal for non-American purchasers.
Persistent Central Bank Accumulation
Official sector purchases have provided consistent underlying support for gold valuations. Polish authorities confirmed their commitment to maintaining 700 tons in gold reserves. Chinese reserves expanded by approximately 5 tons during March, representing the nation’s most significant monthly acquisition in more than twelve months.
ANZ Banking Group forecasts central bank purchases will total roughly 850 tons throughout 2026, with recent price corrections likely stimulating additional buying activity.
Rising oil prices stemming from the conflict have elevated inflation forecasts. This development has prompted market participants to anticipate central banks may postpone interest rate reductions or potentially implement increases, creating challenges for gold given its non-yielding nature.
Inflation Report Takes Priority
American consumer expenditure registered minimal growth in February, predating the conflict’s onset, based on Bureau of Economic Analysis figures. Friday’s March consumer price index release was anticipated to reveal the most significant monthly advance since June 2022.
Elevated inflation figures could strengthen rate increase expectations, potentially pressuring gold prices. Conversely, an extended conflict might decelerate economic expansion and ultimately necessitate rate cuts, which would favor the precious metal.
Spot gold traded at $4,766.30 per ounce as of Friday afternoon Singapore trading hours. Silver advanced 0.9% to $76.03 per ounce. Platinum declined 1.5%, whereas palladium posted gains. Copper futures registered modest increases across both London Metal Exchange and American markets.
Iran’s rejection of claims regarding ongoing Islamabad discussions introduced additional uncertainty as markets headed into the weekend.
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