Gold prices edged lower on Friday as markets continued to balance persistent geopolitical uncertainty in the Middle East against growing expectations that elevated energy-driven inflation could keep interest rates higher for longer.
The precious metal fell to around $4,462.01 per ounce, down 0.29% on the day, and was set for a weekly decline of more than 2%. Despite the short-term weakness, gold remains up 34.74% year-on-year, although it has now declined 4.89% over the past month, according to CFD-linked benchmark trading data.
Sentiment remains shaped by shifting geopolitical developments, with markets closely watching evolving US–Iran dynamics. President Donald Trump has indicated that peace negotiations are nearing a critical stage and has reportedly shown reluctance to escalate into full-scale conflict despite recent tensions.
However, Iranian Foreign Minister Abbas Araghchi has pushed back on those claims, stating that there has been no meaningful progress in talks, highlighting the fragility of diplomatic signals. At the same time, Iran-backed Hezbollah’s rejection of a US-mediated ceasefire proposal between Israel and Lebanon has added further uncertainty to the regional outlook.
The ongoing conflict has also kept energy markets elevated, particularly amid continued concerns about disruptions through the Strait of Hormuz. This has reinforced inflation risks, with traders increasingly factoring in the possibility of prolonged higher interest rates.
