Gold Set for Second Weekly Drop as Oil Stays Near $100 Amid Middle East War
Gold edged higher on Friday but remained on track for a second consecutive weekly decline, as the war in the Middle East kept oil prices near $100 a barrel and reinforced global inflation pressures. Bullion hovered around $5,100 an ounce even as the dollar strengthened. In another attempt to cool energy prices, the White House authorized buyers to take delivery of Russian oil cargoes already at sea.
Gold has fallen about 1.5% this week, putting it on course for its first back-to-back weekly drop since November. The metal’s upward momentum has stalled since the US-Israeli war with Iran began nearly two weeks ago, with no clear resolution in sight.
The conflict signaled little sign of easing after US President Donald Trump threatened further attacks on Iran, following defiant messaging from the Islamic Republic’s new leader. The prospect of prolonged hostilities has continued to disrupt energy flows and add volatility across global markets.
Commerzbank Research commodity analyst Barbara Lambrecht said gold has struggled to benefit from the geopolitical crisis. With oil and gas prices rising sharply again this week, she noted, inflation risks are increasing and could force central banks to respond, limiting the appeal of non-yielding assets such as gold.
Higher energy prices and rising inflation concerns have significantly reduced expectations that the Federal Reserve and other central banks will cut interest rates. US consumer spending data released Friday showed spending barely rose in January amid weaker-than-expected economic growth, adding to concerns that price pressures were building even before the attacks on Iran.
US consumer sentiment also slipped to a three-month low as worries mounted in recent weeks over the impact of higher gasoline prices stemming from the Middle East conflict. Traders now see virtually no chance of a rate cut at next week’s Fed meeting and about an 80% probability of at least one cut this year. Higher borrowing costs typically weigh on precious metals, which do not pay interest, and a sustained rise in inflation could delay a return to easing even as Trump continues to call for lower rates.
Even so, bullion is still up around 18% year-to-date and has largely held above the $5,000-an-ounce threshold. Spot gold rose 0.1% to $5,086.35 an ounce as of 10:17 a.m. in New York. Silver slid 1.8% to $82.30 an ounce, while platinum and palladium both declined. The Bloomberg Dollar Spot Index was higher and on track for a weekly gain.
Source : Newsmaker.id
