Gold Heads for First Week in Red as Havens Cool
Gold headed for its first weekly decline in three as easing geopolitical tensions in the Middle East sapped demand for haven assets and the Federal Reserve’s inflation warning raised the prospect of fewer interest rate cuts.
Bullion was steady near $3,370 an ounce on Friday, down nearly 2% for the week. President Donald Trump will decide whether to join Israel’s strikes on Iran within two weeks, his spokesman said, easing fears of a region-wide war that would threaten energy flows and fuel inflation.
The easing tensions came after Fed Chairman Jerome Powell earlier in the week flagged inflation risks from the impact of Trump’s tariff agenda. That could make it harder for the central bank to lower borrowing costs, which would be negative for gold, which pays no interest and performs better in a lower interest rate environment. The precious metal is still up about 30% this year, and is not far from its record high of $3,500 an ounce set in April. But there were some signs this week that investors are favoring silver and platinum as safe havens given bullion’s high levels.
Big Wall Street banks have been divided over whether bullion can continue its record-breaking rally. Goldman Sachs Group Inc. has reiterated its forecast for $4,000 an ounce next year, while Citigroup Inc. sees prices falling below $3,000 by 2026.
Spot gold fell 0.1% to $3,366.20 an ounce as of 8:54 a.m. in Singapore. The Bloomberg Dollar Spot Index fell 0.1%, but gained 0.4% for the week. Silver was steady, while platinum and palladium rose.
Source: Bloomberg
