Key Highlights
- Gold briefly surged to $4,475 per ounce on Friday before retreating to the $4,408–$4,417 range
- President Trump pushed back his deadline for Iran regarding energy attacks to April 6, citing productive discussions
- Iranian officials have publicly rejected claims that negotiations with Washington are underway
- The precious metal has declined over 15% since the outbreak of the Iran-Israel conflict approximately one month ago
- Turkey’s central bank liquidated and exchanged roughly 60 tons of gold valued at more than $8 billion within a two-week period
The precious metal experienced significant upward momentum during Friday’s Asian session, rallying approximately 2% before surrendering a portion of those advances as the day progressed. By mid-morning in London, spot gold was trading approximately 0.9% higher at $4,417 per ounce. Gold futures contracts similarly advanced, gaining roughly 0.8% to reach $4,442.
Notwithstanding Friday’s upward movement, the yellow metal remained poised for a weekly decline of approximately 1.7%.
The price action followed President Donald Trump’s decision to extend his ultimatum to Iran concerning the reopening of the Strait of Hormuz. Trump had initially threatened military action against Iranian energy infrastructure unless the crucial waterway was reopened. After initially moving the deadline to Friday, he announced Thursday evening that he would extend it once more to April 6.
In a Truth Social post, Trump indicated the extension was granted following an Iranian request. He characterized the ongoing discussions between the nations as progressing “very well” and dismissed contrary media coverage as “erroneous.”
Tehran’s government has publicly refuted any suggestion that bilateral negotiations with the United States are currently taking place.
Understanding Gold’s Underperformance During the Conflict
Gold has experienced a decline exceeding 15% since hostilities between Iran and Israel commenced approximately four weeks ago. This represents a substantial decrease for an asset traditionally viewed as a refuge during periods of geopolitical instability.
The primary factor is crude oil. The virtual blockade of the Strait of Hormuz has driven oil prices significantly upward. Approximately 20% of global oil supplies transit through this strategic passage. Elevated oil prices fuel inflation concerns, prompting investors to anticipate that central banks will maintain elevated interest rates for extended periods. Gold, which generates no income, typically underperforms in elevated interest rate environments.
Additionally, gold reached historic peaks near its January highs, and market observers suggest these elevated levels may have triggered profit-taking activities.
The United States dollar has also strengthened. The US Dollar Index showed modest gains on Friday, trading around 99.99. A robust dollar increases gold’s cost for purchasers using alternative currencies, potentially dampening demand.
Central Bank Liquidations Compound Market Pressure
Turkey’s monetary authority disposed of and exchanged approximately 60 tons of gold during a two-week span. This transaction represents bullion valued at over $8 billion.
Central bank accumulation had served as one of the primary catalysts behind gold’s appreciation throughout the previous two years. Liquidation activity from a significant central bank introduces additional downward pressure on the marketplace.
Silver remained relatively unchanged on Friday, trading at $68.11 per ounce. Both platinum and palladium registered modest gains.
Iran and Israel maintained their exchange of missile attacks on Friday. Tehran additionally launched strikes against multiple Gulf region nations during Friday morning hours.
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