Key Highlights
- Gold maintained its position around $4,765/oz, positioning for a third consecutive weekly advance approaching 2%
- An unstable US-Iran truce and potential weekend negotiations in Islamabad are creating market uncertainty
- Persistent central bank acquisitions from nations like Poland and China provide underlying support
- Declining dollar strength throughout the week enhanced gold’s attractiveness for international purchasers
- Friday’s US inflation report could reshape market expectations regarding Federal Reserve monetary policy
Gold maintained its position around $4,765 per ounce on Friday, setting up the precious metal for its third consecutive weekly advance. The approximately 2% weekly increase unfolds as market participants monitor the precarious ceasefire arrangement between Washington and Tehran.
The truce, declared at the start of the week, initially provided market relief. However, doubts emerged rapidly. Hostilities persisted in Lebanese territory, while Iranian officials contested claims that their representatives had reached Islamabad for weekend diplomatic discussions with American counterparts.
President Trump expressed cautious hope regarding potential peace arrangements. Simultaneously, he issued warnings to Iran concerning levies imposed on vessels navigating the Strait of Hormuz, a critical passageway for international petroleum transport that remains predominantly inaccessible.
Notwithstanding this week’s upward movement, gold has declined approximately 10% since hostilities commenced in late February. Certain market participants liquidated gold holdings to offset deficits in alternative investments, diminishing its traditional safe-haven characteristics.
Oil markets were positioned for their steepest weekly decline since mid-year. Equity markets rebounded throughout the trading period, while the US Dollar Index retreated over 1%, enhancing gold’s affordability for foreign purchasers.
Ongoing Central Bank Accumulation
Central bank acquisitions have provided consistent support for gold valuations. Poland reaffirmed its commitment to maintaining 700 tons in gold reserves. China expanded its holdings by approximately 5 tons during March, representing its most substantial monthly addition in more than twelve months.
ANZ Banking Group projects central bank purchases will total roughly 850 tons throughout 2026, with recent price corrections likely stimulating additional acquisitions.
Escalated oil prices stemming from the conflict have amplified inflation projections. This development has prompted market participants to anticipate potential delays in central bank interest rate reductions or even rate increases, presenting challenges for gold given its non-interest-bearing nature.
Inflation Report Takes Spotlight
US consumer expenditure registered minimal growth in February, preceding the conflict’s outbreak, per Bureau of Economic Analysis figures. March’s consumer price index release on Friday was anticipated to reveal the most substantial monthly advance since mid-2022.
Elevated inflation figures could strengthen rate hike expectations, creating additional headwinds for gold. Conversely, an extended conflict could decelerate economic expansion and ultimately necessitate rate reductions, which would support precious metal valuations.
Spot gold traded at $4,766.30 per ounce during Friday afternoon hours in Singapore. Silver climbed 0.9% to reach $76.03 per ounce. Platinum declined 1.5%, while palladium registered gains. Copper futures advanced modestly across both London Metal Exchange and American trading platforms.
Iran’s contradiction of ongoing Islamabad negotiations introduced additional uncertainty to market sentiment entering the weekend period.
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