Gold prices rebounded on Friday, positioning the precious metal for its first weekly gain since the outbreak of the US-Israeli war in Iran, as bargain-hunting investors moved in after recent declines.
Bullion rose by as much as 4.1 percent to surpass $4,550 an ounce, recovering losses recorded in the previous trading session. The rebound comes after weeks of downward pressure driven by surging oil prices and heightened inflation concerns.
The earlier slump in gold was largely attributed to expectations that the Federal Reserve could raise interest rates to curb inflation—an environment that typically weakens demand for non-yielding assets such as gold.
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Despite the latest recovery, analysts caution that bearish sentiment continues to weigh on the market amid escalating geopolitical tensions. The conflict has intensified following coordinated strikes by the United States and Israel on Iranian nuclear and industrial facilities, with Iran launching retaliatory attacks across the Persian Gulf.
The escalation has unsettled global markets, pushing oil prices higher while dragging equities lower. Although US President Donald Trump had earlier signalled a temporary pause in attacks on Iran’s energy infrastructure, uncertainty remains high.
Since the conflict began on February 28, gold has declined by nearly 15 percent, increasingly mirroring the performance of risk assets such as equities, while moving inversely to oil prices.
Analysts at TD Securities noted that bullion is currently “trading as a risk asset,” reflecting broader market sentiment rather than its traditional safe-haven status.
Further pressure on gold has come from central bank activity, particularly moves by the Central Bank of Turkey, which reportedly sold and swapped about 60 tonnes of gold over two weeks—valued at more than $8 billion.
Central bank purchases have been a key driver of gold’s rally in recent years. However, increased selling by monetary authorities could dampen demand and challenge long-standing assumptions about sustained official-sector buying.
According to TD Securities strategist Daniel Ghali, the economic impact of the conflict on Middle Eastern nations—historically active participants in gold accumulation—could further influence market dynamics.
NorvanReports