Gold Heads for Worst Week in 6 Years as War Cuts Rate Cut Hopes
Gold was on track for its biggest weekly decline in six years as the Middle East war pushed energy prices higher and reduced expectations for interest-rate cuts.
Bullion traded near $4,640 an ounce on Friday, down almost 8% for the week—its steepest weekly drop since March 2020. The surge in crude oil, natural gas, and fuel prices triggered by the conflict has revived inflation concerns and made it less likely that central banks will lower borrowing costs. That’s a headwind for non-yielding gold.
The precious metal, often viewed as a safe haven, has fallen every week since the U.S. and Israel attacked Iran last month. The retreat has coincided with firmer Treasury yields and a stronger U.S. dollar, with some investors selling bullion to cover losses elsewhere in their portfolios. Gold-backed exchange-traded funds have also recorded outflows, adding to the pressure.
“Do not buy-the-dip — there’s way too much volatility,” said Robert Gottlieb, a former precious-metals trader at JPMorgan Chase & Co. and now an independent market commentator. “Until the volatility starts to decrease and prices start to consolidate,” he said, there may be more selling.
The Federal Reserve met midweek and kept rates unchanged, as expected. Chair Jerome Powell emphasized that any return to easing would require clearer progress in bringing inflation down—reinforcing the market’s reluctance to price in rapid rate cuts while the energy shock is building.
Gold’s performance since the Iran war began has echoed a similar pattern in 2022, when Russia’s invasion of Ukraine triggered an energy shock that rippled through global markets. That year, bullion posted a seven-month losing streak through October—the longest such run on record.
Despite the sharp pullback, gold is still about 8% higher year-to-date. Prices had touched a record just below $5,600 an ounce in late January, supported by strong investor enthusiasm, central-bank buying, and concerns about threats to the Fed’s independence.
Spot gold was little changed at $4,640.85 an ounce at 7:36 a.m. in Singapore, after snapping a seven-day losing run on Thursday—its longest slide since October 2023. Silver drifted toward $72 an ounce, down about 10% for the week. Palladium and platinum were also headed for weekly losses.
Source : Newsmaker.id
