Key Takeaways
- Gold touched $4,475 per ounce Friday morning before retreating to the $4,408–$4,417 range
- Trump pushed back his Iran energy infrastructure strike deadline to April 6, citing productive discussions
- Iranian officials publicly refuted claims that diplomatic talks with Washington are underway
- Gold prices have declined over 15% since the outbreak of hostilities between Iran and Israel approximately one month ago
- Turkey’s central bank offloaded and exchanged roughly 60 tons of gold valued at more than $8 billion within a two-week period
Gold experienced a significant uptick during Friday’s Asian session, surging approximately 2% before surrendering a portion of those advances as the trading day progressed. By mid-morning in London, spot gold was higher by roughly 0.9%, trading at $4,417 per ounce. Gold futures contracts similarly advanced, climbing about 0.8% to reach $4,442.
Notwithstanding Friday’s positive movement, gold remained positioned for a weekly decline of approximately 1.7%.
The price action followed US President Donald Trump’s decision to postpone his ultimatum regarding Iran’s reopening of the Strait of Hormuz. Trump had initially threatened military action against Iranian energy infrastructure if the critical shipping lane remained blocked. After moving the deadline to Friday, he announced Thursday evening a further extension to April 6.
In a Truth Social post, Trump indicated that Iran had requested the extension. He characterized the ongoing discussions between the two nations as progressing “very well” and dismissed contradictory media coverage as “erroneous.”
Tehran’s government has publicly rejected assertions that any diplomatic engagement with the United States is taking place.
Understanding Gold’s Decline During the Conflict
Gold has experienced a decline exceeding 15% since hostilities between Iran and Israel commenced roughly one month ago. This represents a substantial correction for an asset traditionally regarded as a refuge during periods of geopolitical turmoil.
The primary factor is petroleum. The virtual closure of the Strait of Hormuz has driven oil prices significantly upward. Approximately 20% of global oil supply passes through this strategic waterway. Elevated oil prices intensify inflation concerns, prompting investors to anticipate central banks maintaining elevated interest rates for extended periods. Gold, which generates no income, typically underperforms in environments characterized by high interest rates.
Gold also reached all-time highs near its January peaks, and several market analysts suggest those elevated levels may have triggered significant profit-taking activity.
The US dollar has also strengthened. The US Dollar Index registered a modest increase Friday, trading around 99.99. A robust dollar increases gold’s cost for international buyers using alternative currencies, potentially dampening demand.
Central Bank Liquidation Intensifies Downward Momentum
Turkey’s central bank liquidated and exchanged approximately 60 tons of gold during a two-week span. This transaction represents over $8 billion in bullion value.
Central bank accumulation had served as one of the primary catalysts for gold’s appreciation over the preceding two years. Liquidation by a significant central bank introduces additional downward pressure on the market.
Silver traded relatively flat Friday at $68.11 per ounce. Both platinum and palladium registered modest gains.
Iran and Israel continued exchanging missile strikes Friday. Tehran also launched attacks targeting multiple Gulf states Friday morning.
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