Gold edged higher on Friday but stayed on track for a weekly loss, pressured by a firmer dollar and bets on further Federal Reserve rate hikes. Oil eased after a Thursday surge tied to Iran-Strait of Hormuz talks, while Treasury yields pushed toward a two-decade high.
Gold rose 0.5% to $4,293.56 an ounce at 04:59 ET (08:59 GMT) on Friday. Gold futures climbed 0.7% to $4,329.97 an ounce over the same window. Despite the daily gain, the metal remained on track for a weekly decline as traders weighed the odds of further rate hikes from the Fed.
The US dollar index ticked down 0.2% to 101.11 on the day but has climbed 0.9% over the past week, pressuring gold because a firmer dollar makes the metal more expensive for overseas buyers.
Oil swings keep inflation bets in play
Oil prices dipped Friday after surging on Thursday, as negotiators reportedly explored a phased deal that would let Iran reopen the Strait of Hormuz in exchange for lifting a US naval blockade. The prospect of disrupted energy flows kept oil elevated and raised concerns that higher fuel costs could stoke inflation.
That dynamic has become an important driver for gold, as investors assess whether renewed energy-price pressure could force the Fed to tighten policy further after last week's rate increase, its first hike in three years.
Treasury yields near a two-decade high
Higher interest rates and bond yields generally weigh on gold because the metal offers no interest income. US Treasury yields rose sharply Thursday, with the 30-year yield approaching its highest level in more than two decades.
Yet ANZ analysts said investment demand has stayed resilient, with no material liquidation so far, despite increasingly challenging macroeconomic conditions. The near-term direction for gold remains closely tied to oil prices, Treasury yields, and expectations for the Fed's next moves.
Source: Commodities & Futures News
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