Key Highlights
- Gold maintained position near $4,765/oz, extending gains for a third consecutive week with nearly 2% increase
- Unstable US-Iran ceasefire agreement and anticipated weekend negotiations in Islamabad create market uncertainty
- Global central banks, particularly Poland and China, maintain consistent gold accumulation
- Dollar weakness throughout the week enhanced gold’s appeal for international purchasers, bolstering valuations
- Friday’s US CPI report carries potential to reshape Federal Reserve monetary policy expectations
Gold valuations remained anchored near $4,765 per ounce on Friday, positioning the precious metal for its third consecutive weekly advance. The approximate 2% weekly climb reflects heightened trader scrutiny of the tenuous ceasefire arrangement between Washington and Tehran.
The ceasefire announcement earlier in the week initially provided market relief. However, stability proved short-lived. Lebanese territory witnessed ongoing military operations, while Iran contested reports that its representatives had reached Islamabad for scheduled weekend discussions with American counterparts.
President Trump expressed optimism regarding potential peace arrangements. Simultaneously, he issued warnings to Iran concerning transit fees levied on vessels navigating the Strait of Hormuz, a critical artery for international petroleum transport that currently faces substantial disruption.
The weekly advance stands in contrast to gold’s nearly 10% decline since hostilities erupted in late February. Market participants liquidated positions to offset portfolio losses elsewhere, diminishing the metal’s traditional safe-haven characteristics.
Oil markets faced their steepest weekly decline since June. Equity markets rebounded during the period, while the US Dollar Index dropped more than 1%, reducing gold’s cost for foreign currency holders.
Persistent Central Bank Accumulation
Official sector purchases continue providing fundamental support for gold markets. Poland reaffirmed its commitment to maintaining 700 tons in gold reserves. China expanded holdings by approximately 5 tons during March, marking its most substantial monthly acquisition in over twelve months.
ANZ Banking Group forecasts central bank acquisitions will approach 850 tons throughout 2026, with recent price corrections likely stimulating additional purchases.
Escalating oil prices stemming from regional conflict have amplified inflation projections. This development has prompted market participants to anticipate potential delays in central bank rate reductions or possible rate increases, creating challenges for gold given its yield-free nature.
Inflation Data Takes Priority
US consumer expenditure registered minimal growth in February, preceding the outbreak of conflict, according to Bureau of Economic Analysis figures. Friday’s March consumer price index release was projected to reveal the most significant monthly advancement since June 2022.
Elevated inflation readings could drive rate expectations upward, applying downward pressure on gold. Conversely, prolonged conflict might decelerate economic expansion and ultimately necessitate rate reductions, creating favorable conditions for the metal.
Spot gold traded at $4,766.30 per ounce during Friday afternoon hours in Singapore. Silver advanced 0.9% to reach $76.03 per ounce. Platinum declined 1.5%, while palladium registered gains. Copper futures showed modest increases across both London Metal Exchange and American trading venues.
Iran’s rejection of claims regarding active negotiations in Islamabad introduced additional ambiguity to market prospects entering the weekend period.
