Gold prices were largely steady in thin trading on Friday, but were headed for a weekly decline, pressured by higher oil prices that have stoked inflation concerns and reinforced expectations of higher-for-longer interest rates.
Spot gold eased 0.1 per cent to $4,614.98 per ounce as of 0436 GMT, and was on track for a weekly loss of about 2 per cent, having dropped to a one-month low on Wednesday. US gold futures for June delivery fell 0.1 per cent to $4,626.40.
Trading volumes were light as financial markets in top gold consumers China and India were closed for public holidays.
“In the Asian session, the market is going to be quite thin because of public holidays, so we’re really in a bit of a crossroads, or at least waiting for the next catalyst to make more of a directional move,” said Kyle Rodda, a senior financial market analyst at Capital.com.
Geopolitical tensions remained in focus after Iran said on Thursday it would respond with “long and painful strikes” on US positions if Washington renewed attacks, reiterating its claim to the Strait of Hormuz.
Brent crude prices held above $110 a barrel as efforts to resolve the Iran conflict hit an impasse.
US inflation accelerated in March as the Iran war raised gasoline prices, reinforcing expectations that the Federal Reserve could keep interest rates on hold well into next year.
Global brokerages have also gradually pared back earlier expectations of two US rate cuts in 2026, with forecasts now split between modest easing and no cuts, amid persistent inflation risks and cautious policymakers.
The European Central Bank and the Bank of England kept interest rates unchanged on Thursday, following similar decisions earlier in the week by the Fed and the Bank of Japan, though all signalled inflation concerns.
While gold is traditionally seen as a hedge against inflation, elevated interest rates aimed at curbing price pressures tend to weigh on demand for the non-yielding metal.
In other metals, spot silver rose 0.4 per cent to $73.99 per ounce, platinum eased 0.2 per cent to $1,981.25 and palladium added 0.1 per cent to $1,525.36.