recaptured some losses but remained on track for the first weekly decline in more than a month, pressured by a stronger US dollar and inflationary risks tied to the ongoing war in West Asia.
Bullion rose as much as 1.2 per cent to break above $5,100 an ounce, though was headed for a weekly loss of nearly 3 per cent.
A gauge of the US currency has risen 1.3 per cent this week, the most since November 2024, while US Treasuries fell for a fourth day on Thursday, lifting yields to the highest in several weeks.
That came as the US-Israeli war with Iran sent oil prices surging and prompted traders to trim bets on the Federal Reserve cutting interest rates.
Swaps traders are pricing in about 34 basis points of rate cuts by year-end, compared with 60 basis points at the end of last week. A stronger dollar and higher borrowing costs are typically negative for gold.
While trading has been choppy and upward momentum has stalled in recent days, gold has still gained nearly a fifth so far this year. US President Donald Trump’s upheaval of global trade and geopolitics, as well as threats to the Fed’s independence, has supported safer assets.
Global markets remained on edge as the war entered its seventh day. Iran launched a barrage of missiles and drone strikes across the Gulf region on Thursday evening, hitting an oil refinery in Bahrain, while Israel continued airstrikes on Tehran and the US suspended operations at its embassy in Kuwait.
Trump insisted that he would be personally involved in selecting Iran’s next leader, while his administration is considering options to address the spike in oil and gasoline prices.
Tehran has attacked energy infrastructure in several countries and the strategic Strait of Hormuz is effectively closed to shipping. Crude was headed for its biggest weekly surge since 2022.
A broad selloff in equities this week has meant that some investors are using gold as a source of liquidity, exposing the haven asset to the swings in global stock markets. News that some central banks may offload some of their holdings also caused concerns that a key pillar of gold’s multiyear rally could be vulnerable.
The head of Poland’s central bank — the world’s biggest reported buyer of bullion — laid out a proposal to generate as much as 48 billion zloty ($13 billion) from the sale of gold reserves to finance defense spending, according to people familiar with the matter.
Spot gold rose 1 per cent to $5,130.42 an ounce as of 10:20 a.m. in Singapore. Silver climbed 1.9 per cent to $83.80, wiping out losses from the previous session. Platinum and palladium also advanced.
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