Gold heads for weekly gain, US-Iran truce in focus

Gold prices held steady on Friday but headed for a weekly gain as the US dollar weakened following the US-Iran truce, though market participants continued to assess its durability and implications for interest rates.

Spot gold steadied at USD 4,761.79 per ounce by 1:40 p.m. ET (1740 GMT). It has gained nearly 2% so far this week.

US gold futures settled 0.6% lower at USD 4,787.40.

“Gold buyers are carefully reclaiming the narrative this week with higher lows every day helped by the tentative ceasefire. Expect a significant battle ahead of USD 5,000; a break back above could re-ignite the bull run,” independent metals trader Tai Wong said.

The two-day-old ceasefire has halted a campaign of US and Israeli air strikes on Iran, but it has yet to ease the blockade of the Strait of Hormuz or quell a parallel conflict between Israel and Iran’s Hezbollah allies in Lebanon.

“As we’ve seen tensions in the Middle East de-escalate, there has been a little higher expectation of potentially seeing lower interest rates at some point, and the dollar came under pressure,” which has seen gold well supported, said David Meger, director of metals trading at High Ridge Futures.

The US dollar was on track for a weekly drop, making greenback-priced gold cheaper for holders of other currencies.

Data showed that US consumer prices increased by the most in nearly four years in March as the war boosted oil prices and the pass-through from tariffs persisted.

Persistently high inflation limits central banks’ ability to cut interest rates. While bullion is seen as a hedge against inflation and geopolitical uncertainty, its attractiveness fades in a high-rate environment due to the absence of yield.

Elsewhere, gold demand in India picked up slightly this week ahead of a key festival, although elevated prices weighed on sentiment, while premiums in China narrowed.

Among other metals, spot silver rose 1.6% to USD 76.26 per ounce, platinum fell 2.3% to USD 2,053.81, and palladium was also down 1.9% at USD 1,527.44. All three metals are headed for weekly gains.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Nia Williams and Alan Barona)