Gold prices hovered above $4,500 an ounce on Friday, remaining largely rangebound as investors weighed conflicting signals from ongoing US-Iran negotiations against rising concerns over inflation and interest rates.
Market sentiment remained cautious after Tehran indicated that the latest US proposal had partially narrowed differences between both sides. However, reports that Iran’s Supreme Leader ordered the country’s enriched uranium stockpile to remain within Iranian territory complicated negotiations, with dismantling Tehran’s nuclear programme remaining a key US demand.
Additional geopolitical concerns emerged following reports that Iran is discussing a permanent toll framework with Oman that could formalize Tehran’s control over shipping traffic through the Strait of Hormuz, one of the world’s most important oil transit routes. President Donald Trump reportedly rejected the proposal, insisting the passage remain open and unrestricted.
While geopolitical tensions would traditionally support safe haven demand for gold, rising oil prices have instead intensified fears of a renewed global inflation shock. Brent crude remained above $105 per barrel this week amid concerns over possible disruptions to Middle East energy supplies.
Analysts say the surge in energy prices is increasing expectations that central banks, particularly the US Federal Reserve, may keep interest rates elevated for longer or even consider additional tightening measures. Higher interest rates typically reduce the appeal of non-yielding assets such as gold.
Reuters reported that gold prices declined slightly on Friday and were headed for a second consecutive weekly loss as markets increasingly focused on inflation risks rather than safe haven flows. Spot gold traded around $4,523 per ounce, while investors priced in a growing probability of further US rate hikes later this year.
Despite remaining historically elevated, gold prices are now roughly 14% below levels seen earlier during the escalation of the Iran conflict, reflecting how shifting monetary policy expectations and a stronger US dollar have begun to outweigh traditional geopolitical support for bullion.
